Gold yesterday settled down by -1.34% at Rs 142167 as a rebound in oil prices heightened inflation concerns and reinforced expectations for prolonged higher interest rates. Fed officials Beth Hammack and Thomas Barkin supported further interest rate increases and advocated for gradual tightening, given that inflation continues to exceed the central bank’s 2% target. Currently, traders perceive a 68% probability that the Fed will raise rates in December, according to CME’s FedWatch tool. In light of the hawkish policy implications, Goldman Sachs has revised its end-2026 gold price forecast down to $4,150 per ounce from a previous estimate of $4,650, and has also adjusted its end-2027 forecast to $4,800 per ounce from $5,400 per ounce. Meanwhile, Citi continues to uphold a 0-3 month price target of $4,500 per ounce and a 6-12 month target of $5,000 per ounce.
Meanwhile, data from the World Gold Council indicated that global gold ETFs experienced net inflows of $2.7 billion in October, with holdings increasing by 19 tonnes to reach 4,275 tonnes. However, assets under management decreased by 6% to $542 billion due to a monthly price decline, while sales of gold products at the Perth Mint fell nearly 30% in October, totalling 32,933 ounces. Physical gold demand has seen an uptick in significant Asian markets, as reduced prices have stimulated retail purchases in India in anticipation of Diwali, while also attracting Chinese buyers following a decline in the global benchmark gold price below $4,000 an ounce. Indian dealers are reporting premiums reaching up to $4 an ounce, whereas Chinese bullion is trading at premiums ranging from flat to $9 an ounce.
China’s gold consumption from January to September 2026 totalled 684.623 tonnes, reflecting a year-on-year increase of 0.28%. The China Gold Association indicated that domestic production amounted to 347.990 tonnes, and highlighted that China augmented its gold reserves by 103.26 tonnes during the first three quarters, resulting in total reserves of 2,409.59 tonnes. The WGC revised its full-year gold investment growth forecast down to 200 metric tonnes from 400 tonnes, while increasing its estimate for central bank purchases. It observed that Q3 demand for bars and coins decreased by 19% to 268 tonnes, and jewellery demand fell by 17% to 313 tonnes. In contrast, central bank purchases surged by 42% to 321 tonnes.
In India, the WGC anticipates that gold demand will decline to a six-year low in 2026, reaching approximately 650 metric tonnes. This decrease is attributed to high prices, increasing living costs stemming from the Iran war, and a weak monsoon. Additionally, demand in Q3 has decreased by 29% year-on-year, totalling 162.5 metric tonnes. From a technical perspective, the market is experiencing new selling pressure, as open interest increased by 0.35% to close at 15771, while prices declined by Rs 1928. Gold is currently finding support at Rs 141280, with the possibility of testing lower levels around Rs 140400. Resistance is anticipated at Rs 142970, and a breakthrough above this level could lead to prices approaching Rs 143770.
