Gold settled 0.6% higher at Rs. 144,095, buoyed by a weaker US dollar and declining Treasury yields in the aftermath of the US midterm elections. Additionally, a significant correction in crude oil prices alleviated inflation concerns and tempered expectations for further interest rate hikes. The dollar slipped to a more than one-month low as Democrats secured significant electoral gains, raising expectations of a divided government and potential changes in the Trump administration’s policy agenda. Citi maintained a bullish longer-term outlook, projecting gold at $4,500 per ounce over 0-3 months and $5,000 over 6-12 months, supported by expectations of the Strait of Hormuz reopening and de-escalation in the Yemen-Saudi conflict.
Nonetheless, physical demand continues to be lacklustre, as evidenced by Perth Mint’s October gold sales, which declined by 30% month-on-month to 32,933 ounces and by 61% year-on-year. China’s gold consumption experienced a year-on-year increase of 0.28%, reaching 684.623 tonnes in the period from January to September 2026. This growth was bolstered by a significant rise of 26.26% in demand for bars and coins, totalling 444.576 tonnes. In contrast, jewellery consumption saw a decline of 33.86%, amounting to 178.612 tonnes.
China increased its gold reserves by 103.26 tonnes in the first nine months, bringing total holdings to 2,409.59 tonnes, which signifies 23 consecutive months of acquisitions. The World Gold Council has revised its 2026 investment demand growth forecast downward to 200 tonnes from the previous estimate of 400 tonnes, citing a 19% year-on-year decline in bar and coin demand. In contrast, central bank purchases saw a significant increase of 42%, reaching 321 tonnes in the third quarter. India’s gold demand is anticipated to fall to approximately 650 tonnes by 2026, marking a six-year low, influenced by high prices and a sluggish rural economy.
Technically, the market is experiencing short covering, as evidenced by a 2.35% decline in open interest to 15,716 contracts, accompanied by a price increase of Rs. 861. Gold is currently establishing a support level at Rs. 142,930. Should prices fall below this threshold, they may test Rs. 141,760. Conversely, resistance is identified at Rs. 145,690, with the next upside target positioned at Rs. 147,280 if this level is surpassed.
