Gold prices experienced a decline of 0.53%, concluding at Rs 123,451, as investors navigated the interplay between diminishing geopolitical tensions and evolving anticipations regarding U.S. monetary policy. The metal experienced initial selling pressure but subsequently regained some of its losses following the release of weaker-than-anticipated U.S. CPI data, which bolstered expectations for additional Federal Reserve rate cuts in the near term.

Headline inflation increased to 3% in September, falling short of the anticipated 3.1%, while core inflation experienced a slight decline, indicating a reduction in price pressures. The expectation of two additional rate cuts by the end of the year has bolstered bullion, increasing its attractiveness as a non-yielding asset. Goldman Sachs has reiterated its optimistic forecast, anticipating that gold will attain a price of $4,900 per ounce by the conclusion of 2026. This projection is supported by robust investor demand for diversification and underlying buying trends that could underpin a sustained long-term rally.

Physical demand in India exhibited a subdued trend as buyers anticipated potential price corrections; however, the festive demand surrounding Dhanteras and Diwali provided some degree of support. Indian dealers sustained a premium of $25 per ounce, whereas China and Singapore experienced a resurgence in buying interest. In August, Swiss gold exports to China experienced a remarkable increase of 254%, reaching 35 tons. Shipments to India also saw an uptick, highlighting strong demand from Asia, despite a significant decline in U.S. imports.

From a technical perspective, gold is experiencing long liquidation, evidenced by a 4.21% decline in open interest, which now stands at 12,343. Support is identified at Rs 121,820, with a potential decline to Rs 120,190 if breached, while resistance stands at Rs 124,660; a breakthrough could propel prices towards Rs 125,870.