Gold prices declined by 0.51% to Rs 1,22,927, influenced by diminishing expectations for an imminent rate cut by the U.S. Federal Reserve and a decrease in physical demand in Asian markets. The likelihood of a December Fed rate cut has decreased significantly to 46%, a decline from 67% observed last week, as persistent inflation and disappointing U.S. private-sector employment figures have compelled Fed officials to take a more prudent approach.

Market participants are currently anticipating significant U.S. data releases, notably the postponed September jobs report, which may offer additional insights into the policy trajectory. Demand for physical gold in Asia has continued to exhibit weakness, attributed to elevated price levels. In India, discounts have expanded to $43 per ounce, marking the highest level in five months, in contrast to $14 per ounce observed last week.

China experienced a varied sentiment in bullion trading, fluctuating from a $8 discount to a $4 premium, whereas premiums in Singapore were observed between $1.50 and $3.50. Modest premiums were also recorded in Hong Kong and Japan. On the global front, overall gold demand increased by 3% year-on-year to 1,313 tonnes in the third quarter, marking the highest quarterly level ever recorded, propelled by a surge in investment demand.

Demand for bars and coins increased by 17%, while inflows into ETFs soared by 134%, counterbalancing a 23% decline in jewellery fabrication. Central bank purchases rose by 10% to 219.9 tonnes, as total supply reached a record level driven by increased recycling and mine output. From a technical perspective, gold is experiencing long liquidation, as evidenced by a 5.82% decline in open interest, bringing it to 11,127. Support is positioned at Rs 1,22,180, succeeded by Rs 1,21,435, whereas resistance is established at Rs 1,23,660, with a breakout possibly propelling prices towards Rs 1,24,395.