Gold yesterday concluded the trading session with an increase of 0.28% at Rs 117,588, bolstered by anticipations of additional rate cuts from the Federal Reserve and a resurgence in safe-haven demand. Pressure on the U.S. economy has intensified, as the report indicates a decline in private-sector employment for the second consecutive month, marking the largest drop since March 2023. This development raises expectations that the Federal Reserve will maintain a dovish stance.
The U.S. government shutdown has postponed the September nonfarm payrolls report, introducing additional uncertainty in advance of the Federal Reserve’s policy meeting scheduled for late October. Political gridlock and potential job risks have enhanced gold’s status as a safe haven. Meanwhile, the PBoC has sustained its gold acquisitions for the tenth consecutive month, while China has also proposed to serve as custodian for foreign gold, indicating a commitment to long-term demand support. Nonetheless, trends in physical demand exhibited a variety of signals.
In August, China’s gold imports through Hong Kong experienced a significant decline of 39.11%, totaling 26.746 tons. Concurrently, dealers increased discounts to a range of $31–$71 per ounce, reflecting a lack of robust demand. In India, premiums remained stable at up to $7 per ounce, marking the highest level since November 2024, indicative of robust demand in the face of high prices. In other parts of Asia, premiums remained at moderate levels in Hong Kong, Singapore, and Japan.
From a technical perspective, the market is experiencing new buying activity, evidenced by a 3.22% increase in open interest to 15,493, alongside a price increase of Rs 323. Gold is currently establishing a support level at Rs 116,975. Should this level be breached, a decline towards Rs 116,360 may occur. Conversely, resistance is identified at Rs 118,325, with a potential breakout above this threshold possibly propelling prices towards Rs 119,060. Gold Rises in Response to Speculation on Rate Cuts and Increased Demand for Safe-Haven Assets