Gold prices experienced a decline of 0.34%, concluding at Rs 1,25,504, as traders engaged in profit-taking while considering the increasing likelihood of a U.S. interest rate reduction in December. Market sentiment experienced a notable shift following remarks from prominent Federal Reserve officials, such as Mary Daly and Christopher Waller, which bolstered expectations for monetary easing. The probability of a December rate cut has increased significantly to 85%, rising from a mere 30% just one week prior, as per indications. 0 Nevertheless, the mixed signals from the Federal Reserve maintained a heightened level of volatility, leading to increased hedging activity in swaptions and rate derivatives. Physical demand in key Asian markets has remained lackluster, influenced by ongoing price volatility.

In India, dealers provided discounts reaching $21 per ounce—an improvement from last week’s $43 yet still indicative of subdued demand, even amidst the ongoing wedding season. China maintained a measured approach to purchasing, with gold trading at parity to a $5 discount, while Swiss exports in October experienced an 11% decline as elevated global prices suppressed Chinese demand.

Global demand, however, presented a more robust outlook. As reported by the World Gold Council, demand in the third quarter increased by 3% compared to the previous year, reaching a historic 1,313 tons. This growth was primarily fueled by a 17% surge in bar and coin purchases, predominantly from India and China, alongside a substantial 134% increase in ETF inflows.

Gold is currently experiencing long liquidation, as evidenced by a significant decline in open interest, which has dropped by 28.44% to 4,828, alongside a price decrease of Rs 427. Support is positioned at Rs 1,25,220, with additional downside potential towards Rs 1,24,940, while resistance is anticipated at Rs 1,25,845; a breakout could elevate prices to Rs 1,26,190.