Gold prices fell by 1.84%, closing at Rs. 140,525, influenced by the hawkish remarks from Federal Reserve Governor Christopher Waller. He expressed support for a rate hike in December and suggested that a more substantial increase of 50 basis points might be on the table should inflation deteriorate. Markets are reflecting an almost 99% likelihood of a rate increase in December, as investors look to US consumer inflation data for additional insights into monetary policy. Commerzbank anticipates an additional rate hike, pointing to robust employment figures and persistent inflationary pressures.
Meanwhile, China’s central bank has sustained its gold accumulation, marking 24 consecutive months of buying in October, with reserves increasing to 78.3 million fine troy ounces. China increased its reserves by 103.26 tonnes in the first nine months of 2026, bringing the total to 2,409.59 tonnes. China’s domestic gold production experienced a year-on-year decline of 11.44%, totalling 347.99 tonnes. In contrast, consumption saw a slight increase of 0.28%, reaching 684.62 tonnes, bolstered by a significant rise of 26.26% in bar and coin demand, despite a sharp drop of 33.86% in jewellery consumption. The World Gold Council has revised its forecast for global investment demand growth, now projecting an increase of 200 tonnes, down from a previous estimate of 400 tonnes. This adjustment is attributed to a decline in bar and coin purchases.
Conversely, expectations for central bank acquisitions have been elevated to a minimum of 848 tonnes for 2026. Global gold ETFs experienced inflows totalling 211 tonnes during the third quarter, whereas central bank acquisitions rose by 42% to reach 321 tonnes. In India, gold demand is projected to decrease to approximately 650 tonnes by 2026, marking its lowest level since 2020. This decline is attributed to high prices, subdued rural demand, and prevailing economic pressures that are impacting jewellery consumption. Physical demand, however, showed signs of improvement across Asian markets in anticipation of Diwali, with Indian dealers reporting premiums reaching as high as $4 per ounce.
Meanwhile, speculative net long positions decreased by 3,107 contracts to 104,297 in the week ending November 3, suggesting a slight reduction in bullish positioning. Gold is currently experiencing renewed selling pressure, as evidenced by a 1.72% increase in open interest to 16,449 contracts, alongside a price decline of Rs. 2,641, suggesting the establishment of further short positions. Support is positioned at Rs. 139,760, with an additional level at Rs. 138,990. Conversely, resistance is identified at Rs. 141,900, beyond which prices may approach Rs. 143,270.
