Gold prices concluded the trading session with a slight increase of 0.07%, reaching Rs 112,629, as robust U.S. economic indicators persistently support the case for elevated interest rates. The U.S. GDP growth for Q2 has been revised upward to 3.8%, accompanied by an unexpected increase in durable goods orders and a decline in jobless claims to a two-month low.

These indicators have reduced expectations for three Fed rate cuts this year, thereby increasing the opportunity cost associated with holding non-yielding bullion. Nonetheless, gold’s status as a safe-haven asset remained robust, bolstered by geopolitical tensions, fiscal uncertainty in the United States, and ongoing demand from central banks, as evidenced by the People’s Bank of China increasing its reserves for the tenth consecutive month.

On the physical side, India’s gold premiums have reached a 10-month high of $7 per ounce, despite record prices, indicating robust festive demand. In contrast, Chinese dealers have expanded discounts to a five-year high of $21-$36/oz amid a decline in demand. However, imports from Switzerland experienced a remarkable increase of 254% in August, reaching 35 tons, the highest level since May 2024. India’s imports rose to 15.2 tons, whereas U.S. inflows experienced a significant decline due to tariff-related apprehensions. Premiums in Hong Kong and Singapore remained stable, whereas Japan was transacted at par with a slight premium.

From a technical perspective, gold is currently experiencing a short covering phase, evidenced by a 48.76% decline in open interest to 3,349, despite a price increase of Rs 74. Support is positioned at Rs 112,120, with the potential for a test of Rs 111,615 if this level is breached. Resistance is identified at Rs 113,190, and a sustained movement above this threshold could lead to prices advancing towards Rs 113,755.