Gold settled sharply higher by 2.71% at Rs. 143,234, supported by a weaker as Democrats secured early victories in the US midterm elections, increasing political uncertainty and weighing on the greenback. Investors are now awaiting US non-farm payrolls data for further clues on the Federal Reserve’s monetary policy outlook, with markets pricing in a 78% probability of a December rate hike, which could limit bullion’s upside as higher interest rates increase the opportunity cost of holding non-yielding assets.
Meanwhile, geopolitical uncertainty persisted as Iran and the US remained far from reaching an agreement to end their conflict, while Trump declined to rule out resuming military operations. On the demand front, the World Gold Council reduced its 2026 global investment demand growth forecast to 200 tons from 400 tons, citing slower bar and coin purchases, which declined 19% year-on-year to 268 tons in the third quarter, while jewellery demand fell 17% to 313 tons. However, physically backed gold ETFs recorded strong third-quarter inflows of 211 tons, while central bank purchases increased 42% to 321 tons, the highest quarterly level since the fourth quarter of 2024.
The WGC raised its 2026 central bank demand forecast, expecting purchases to at least match 2025 levels of 848 tons. In India, gold demand is projected to decline to around 650 tons in 2026, the lowest since 2020, as elevated prices and rural economic weakness weigh on consumption. Indian demand fell 29% year-on-year to 162.5 tons in the September quarter. Physical demand across major Asian markets also remained subdued.
Meanwhile, London’s gold vault holdings increased 1.96% month-on-month to 9,821 tons at the end of September 2026. Technically, the market is witnessing short covering, as open interest declined 1.15% to 16,095 contracts while prices increased by Rs. 3,782. Gold is getting support at Rs. 140,470, below which prices could test Rs. 137,700, while resistance is placed at Rs. 144,710. A sustained move above this level could push prices towards Rs. 146,190.
