Gold prices experienced a notable increase of 2.69%, concluding at Rs 1,24,629. This movement was largely attributed to heightened safe-haven demand, spurred by intensifying U.S.-China trade tensions and rising anticipations regarding potential rate cuts by the U.S. Federal Reserve. Sentiment experienced an uptick following U.S. President Donald Trump’s threat to impose 100% tariffs on Chinese goods and the announcement of new export controls, which has reignited geopolitical uncertainty.

The extended U.S. government shutdown, coupled with increasing anticipations of a 25-basis point Federal Reserve rate cut at the forthcoming meeting on October 29, has provided additional support for bullion. Goldman Sachs has adjusted its 2026 gold forecast upward to $4,900, attributing this revision to significant ETF inflows and substantial purchases by central banks. In terms of physical demand, India has shown resilience, maintaining robust interest even in the face of record pricing. Dealers are now quoting premiums as high as $15 per ounce, a notable increase from $9 observed the previous week, in anticipation of significant festive demand.

In contrast, Chinese purchasing exhibited weakness following the holiday period, influenced by elevated prices, prompting discounts ranging from $48 to $60 per ounce to encourage demand. Swiss customs data indicated that gold exports to China surged by 254% in August, reaching 35 tons, while shipments to India also increased, compensating for the decline in flows to the U.S.

From a technical perspective, the market is experiencing short covering, evidenced by a 5.33% decline in open interest to 15,705 lots, alongside a price increase of Rs 3,265. Support for Gold is identified at Rs 1,23,470, and a decline below this level could lead to a test of Rs 1,22,310. Conversely, resistance is established at Rs 1,25,320, with a breakthrough potentially driving prices toward Rs 1,26,010 levels.