Gold yesterday settled higher by 0.76% at Rs 1,27,210, reaching a new record high as renewed U.S.-China trade tensions and expectations of additional U.S. Federal Reserve rate cuts enhanced safe-haven demand. Federal Reserve Chair Jerome Powell emphasized a lackluster labor market while also pointing to indications of a stronger economic path, bolstering expectations for a forthcoming 25-basis-point rate cut at the next Fed meeting, with an additional reduction anticipated in December.

Increased geopolitical tensions, following U.S. President Donald Trump’s suggestion of reducing trade relations with China, provided additional impetus for the metal’s upward movement. In India, the demand for physical gold has demonstrated resilience, even in the face of rising prices, as both jewellers and investors engage in active purchasing in anticipation of the upcoming festive season. Indian dealers have reported premiums reaching $15 per ounce above official domestic prices, an increase from the $9 observed the previous week. In contrast, demand in leading consumer China exhibited weakness following the holiday period, with price reductions of $48–$60 per ounce implemented to entice purchasers.

In Hong Kong and Singapore, gold exhibited limited fluctuations, trading within a range from slight discounts to $1.30 premiums, whereas in Japan, it maintained parity with a $1 premium. In August, Swiss gold exports to China experienced a remarkable increase of 254%, reaching 35 tons, the highest level since May 2024. Concurrently, shipments to India rose to 15.2 tons, highlighting robust demand from the Asian market.

Gold is currently experiencing renewed buying momentum, evidenced by a 1.64% increase in open interest, which has reached Rs 15,905 contracts, alongside a price increase of Rs 954. Immediate support is positioned at Rs 1,26,370 and Rs 1,25,530, whereas resistance is identified at Rs 1,27,895, with a potential breakout anticipated to challenge Rs 1,28,580.