Gold prices experienced a modest increase, closing 0.34% higher at Rs 123,051 as investors turned to safe-haven assets in anticipation of the forthcoming Federal Reserve meeting minutes and the postponed US jobs report. The minutes revealed a split within the Federal Reserve, as a number of officials advocated for a rate cut in October, while others favored maintaining the current rate, and some were against any easing measures.

Job data scheduled for release on Thursday is anticipated to reveal approximately 50,000 new jobs added in September, whereas increasing unemployment claims indicate a softening labor market. The likelihood of a rate cut in December has diminished, decreasing to slightly above 46% from 63% the previous week, thereby providing further backing for gold. Risk sentiment continued to exhibit weakness, driven by apprehensions regarding elevated valuations in the technology sector, thereby enhancing the appeal of gold. Goldman Sachs observed robust activity from central banks, estimating purchases of 64 tonnes in September compared to 21 tonnes in August, while reaffirming its price target of $4,900 by the end of 2026.

Physical demand, however, remained subdued across Asia as a result of high prices. In the third quarter, global gold demand experienced a year-on-year increase of 3%, reaching a record high of 1,313 tonnes. This growth was primarily fueled by a notable 17% rise in demand for bars and coins, alongside a remarkable 134% increase in inflows into exchange-traded funds. Central bank purchases rose by 10% to 219.9 tonnes, while supply hit an all-time high, driven by a 6% increase in recycling and a 2% rise in mine output.

From a technical perspective, the market indicates short covering, evidenced by a 5.47% decline in open interest to 10,237. Support is positioned at Rs 122,065, with additional downside potential toward Rs 121,075. Resistance stands at Rs 124,250, and a breakout may propel prices towards Rs 125,445.