Gold prices experienced a decline, closing 0.23% lower at Rs 122640, amid diminishing expectations for a reduction in US interest rates. The lack of crucial US economic data in recent weeks, along with the hawkish indications from various Federal Reserve officials, has notably diminished expectations for a rate cut in December. Fed Vice Chair Philip Jefferson indicated that although employment risks have escalated, the Fed ought to proceed “slowly” regarding additional rate cuts.

The probability of a 25 basis point cut in December has now been revised to 43%, a significant decline from the more than 60% forecasted earlier this month. Investors are currently anticipating the postponed US September jobs report and the Federal Reserve meeting minutes for a more definitive indication of policy direction. Goldman Sachs observed robust central-bank acquisitions, estimating 64 tons of purchases in September, which underscores ongoing trends in long-term diversification.

In the third quarter, global gold demand experienced a year-on-year increase of 3%, reaching a total of 1,313 tons, marking the highest quarterly level ever recorded. Investment demand experienced a notable increase, as bar and coin purchases rose by 17%, while ETF inflows saw a remarkable growth of 134%. Central-bank purchases rose by 10% to 219.9 tons, coinciding with record-high supply levels driven by enhanced recycling efforts and increased mine production.

From a technical perspective, gold is experiencing long liquidation, as evidenced by a 2.68% decline in open interest to 10,829, alongside a price decrease of Rs 287. Support is established at Rs 121255, with additional downside potential toward Rs 119870. Resistance is identified at Rs 123530, and a breakout could propel prices toward Rs 124420.