Gold prices declined by 0.3% to close at Rs 1,09,822 as investors took profits following the metal’s ascent to record highs, with attention squarely on the U.S. Federal Reserve’s policy decision. Softer payroll data has bolstered expectations for several rate cuts this year, with markets now factoring in three reductions. U.S. economic resilience was underscored by a 0.6% increase in August retail sales, while the core control group experienced a 0.7% rise for the fourth consecutive month.

The Federal Reserve implemented a 25 basis points reduction to a range of 4.00%–4.25%, marking its inaugural cut since December. Additionally, it indicated the possibility of a further 50 basis points in easing by the end of the year, alongside an upgrade to GDP growth projections. Gold continues to benefit from safe-haven inflows, central bank purchases, and a weakening U.S. dollar, experiencing a remarkable 41% increase year-to-date. Commerzbank has adjusted its forecast to $3,600 per ounce by the end of the year and $3,800 by 2026. In contrast, UBS anticipates a price of $3,800 by the end of 2025 and $3,900 by mid-2026, attributing these projections to expectations of rate cuts and geopolitical risks.

ETF holdings are projected to exceed 3,900 tons by the end of 2025, approaching record levels. Nonetheless, physical demand throughout Asia has diminished as elevated prices have discouraged retail purchasing. In China, discounts expanded to a range of $17–$24 per ounce, whereas India experienced tighter discounts accompanied by modest premiums.

Gold is currently experiencing long liquidation, as evidenced by a decline in open interest of 10.67%, bringing it down to 13,908. Support is positioned at Rs 1,09,355, with the possibility of testing Rs 1,08,880 if it is breached. Resistance is identified at Rs 1,10,130, with the potential for an upward movement towards Rs 1,10,430 should momentum increase.