Gold prices experienced a decline of 0.68%, settling at Rs 1,29,759, as traders opted to realize profits following the metal’s ascent to a six-week peak. The correction occurred against a backdrop of robust expectations for a 25 basis points reduction in the U.S. Federal Reserve’s interest rate next week, with market participants assigning an 88% probability to this outcome. Weak U.S. macroeconomic indicators, highlighted by a ninth consecutive month of contraction in the manufacturing sector, have bolstered the probability of policy easing. Investors are currently anticipating the ADP employment report and the postponed September PCE inflation data for additional guidance. Despite the recent pullback, gold has experienced gains in nearly every month this year and is poised for its strongest annual performance since 1979, bolstered by persistent central-bank purchasing and substantial ETF inflows.

Physical demand across Asian hubs has remained subdued, influenced by elevated prices that have impacted retail purchases. In India, despite the ongoing wedding season, dealers provided discounts reaching up to $18 per ounce, a slight decrease compared to the previous week. China experienced a disparity in premiums, fluctuating between +$1.40 and discounts of -$16, exacerbated by Beijing’s decision to eliminate the VAT exemption on gold acquisitions.

Premiums in Singapore and Hong Kong remained relatively modest, reaching up to $2.50 and $1.80, respectively. In the third quarter, global demand experienced a year-on-year increase of 3%, reaching a record high of 1,313 tons. This growth was primarily fueled by a notable 17% rise in demand for bars and coins, alongside a remarkable 134% increase in inflows to exchange-traded funds.

Gold is currently experiencing long liquidation, as evidenced by a 0.75% decrease in open interest, bringing it to 13,305. Support is positioned at Rs 1,28,910, with additional downside potential toward Rs 1,28,055. Conversely, resistance stands at Rs 1,30,710, and a breakout could propel prices to Rs 1,31,655.