Gold prices experienced a notable recovery, closing 1.19% higher at Rs 124191, bolstered by revived anticipations of imminent US interest rate reductions following recent statements from Federal Reserve officials. New York Fed President John Williams indicated potential for easing, contributing to gold’s recovery, despite policymakers maintaining focus on persistent inflation and a robust labor market. Chicago Fed President Austan Goolsbee expressed reservations regarding the preemptive implementation of rate cuts, pointing to a lack of advancement toward the 2% inflation goal.

Meanwhile, the September NFP increased by 119,000, significantly exceeding expectations. However, the substantial downward revision for August and an uptick in the unemployment rate to 4.4%, the highest level since 2021, introduced mixed signals to the macroeconomic landscape. Physical demand throughout Asia has continued to be lackluster, as Indian dealers are providing discounts reaching $21 per ounce, a decrease from the five-month peak observed last week. Chinese demand exhibited comparable weakness, with bullion trading at parity to a $5 discount in the context of elevated global prices.

In October, Swiss gold exports experienced an 11% decline compared to the previous month, indicative of diminished purchasing activity from China. In terms of demand, global gold demand increased by 3% year-over-year to 1,313 tons in the third quarter, marking the highest level on record, propelled by robust investment interest. Purchases of bars and coins experienced a notable increase of 17%, whereas physically backed ETFs witnessed a remarkable surge of 134%. Central bank purchases rose by 10%, sustaining robust levels above those observed prior to 2022.

Gold is currently experiencing short covering, evidenced by a 10.84% decline in open interest. Support is established at Rs 122310, with a breach potentially leading to Rs 120430, while resistance is noted at Rs 125305, beyond which Rs 126420 could be examined.