Gold prices declined by 0.7%, closing at Rs 1,09,052, as a robust U.S. dollar dampened market sentiment in the aftermath of the Federal Reserve’s recent policy announcement. The Federal Reserve implemented a 25 basis points reduction in interest rates as expected, yet adopted a prudent stance regarding additional easing.

Chair Jerome Powell highlighted a “meeting-by-meeting” strategy in light of indications of labor market fragility. Although this prudent approach has diminished immediate optimism, gold remains bolstered by long-term expectations of additional rate reductions and inflows seeking safety. On the fundamental side, global banks exhibit a positive outlook, with Commerzbank forecasting $3,600 per ounce by the end of 2025 and $3,800 by 2026, whereas UBS anticipates $3,800 by the end of 2025 and $3,900 by mid-2026.

ETF holdings are anticipated to surpass 3,900 tons, approaching historical peaks. Nonetheless, physical demand throughout Asia remained subdued as a result of unprecedented price levels. In China, discounts have expanded to a range of $17–$24 per ounce, whereas India experienced modest discounts of $6 alongside slight premiums of $2, indicative of a subdued retail appetite. Notwithstanding this, central bank acquisitions persisted, as the People’s Bank of China prolonged its purchases for the tenth consecutive month.

Gold is currently experiencing long liquidation, evidenced by a 9.49% decline in open interest to 12,588, alongside a price decrease of Rs 770. Support is established at Rs 1,08,560, and a breach below this level may lead to a decline towards Rs 1,08,070. Conversely, resistance is identified at Rs 1,09,670, with the possibility of testing Rs 1,10,290 should strength persist.