Gold experienced an increase of 1.26% yesterday, closing at Rs 116,344, buoyed by a depreciating dollar and heightened anticipations of additional rate cuts by the US. The most recent US PCE inflation figures were in line with expectations, bolstering market speculation that the Federal Reserve might persist with its policy easing trajectory in the coming months. Market participants are currently assigning a 90% likelihood to a rate cut in October, with approximately 65% probability for a further reduction in December.

Focus shifts to forthcoming US economic indicators, including job openings, private payrolls, ISM manufacturing PMI, and non-farm payrolls, amid apprehensions regarding a possible US government shutdown. On the trade front, the new tariffs announced by President Donald Trump, which target imported drugs, trucks, and furniture and are set to take effect on October 1, have introduced additional uncertainty into the economic outlook.

Meanwhile, global physical gold flows exhibit a mixed pattern. China’s net gold imports through Hong Kong experienced a significant decline of 39.11% in August, dropping to 26.746 metric tons from 43.923 tons in July. This trend indicates a reduction in demand, coinciding with discounts that have expanded to a range of $31–$71 per ounce. Nonetheless, premiums in India remained robust at up to $7 per ounce, marking the highest level since November 2024, while consistent demand was observed across other Asian centers.

From a technical perspective, the market is experiencing new buying activity, evidenced by an increase in open interest of 1.52%, reaching a total of 14,384 contracts. Gold is currently establishing a support level at Rs 115,465, and if it falls below this mark, it may approach Rs 114,585. Resistance is identified at Rs 116,860, with the possibility of advancing to Rs 117,375 if strength is maintained.