Gold prices climbed by 0.79% to settle at ₹78,656, driven by heightened demand for safe-haven assets amid rising tensions in the Middle East. Following Hezbollah’s announcement of an intensified conflict with Israel and subsequent Israeli strikes on Beirut’s southern suburbs, investors turned to gold for refuge. Uncertainty surrounding the upcoming U.S. presidential elections also contributed to gold’s appeal, alongside expectations of looser monetary policies from major central banks. The People’s Bank of China (PBoC) recently lowered key interest rates, and the European Central Bank (ECB) cut rates for the third time this year, further supporting gold’s upward momentum.
Despite this, strong economic data from the U.S. has led to expectations that the Federal Reserve may take a less dovish approach. In India, physical gold dealers are offering discounts ahead of the festive season, as record-high prices have dampened demand. Discounts have increased to up to $8 an ounce, compared to a $3 premium last week. In China, the world’s largest gold consumer, dealers have narrowed discounts to $3-$14 below international spot prices, indicating slightly improved demand despite high prices. The Chinese retail market has faced challenges this year due to elevated prices and a slowing economy. In Singapore, gold was sold with a discount of $0.80 to a premium of $2.20.
According to the World Gold Council (WGC), global gold demand (excluding over-the-counter trading) fell by 6% year-on-year in the second quarter, with jewelry consumption plunging by 19% due to high prices.
From a technical perspective, gold is experiencing short covering, with open interest dropping by 1.05% to settle at 15,026 contracts. Support for gold is found at ₹78,330, and a fall below this level could push prices down to ₹78,010. Resistance is expected at ₹78,830, with a breakout above this level potentially driving prices toward ₹79,010.
Related topics:
- Gold Hits Record High as Geopolitical Tensions Drive Investors to Safety
- Gold Price Eases from All-Time Peak; Downside Potential Appears Limited
- Gold Prices Reach Record Highs Amid Election Fears and Middle East Risks
