Gold took a small hit in the latest session as traders kept a close eye on two big things: what the US Federal Reserve plans to do next with interest rates, and the tense situation unfolding across the Middle East. With the US dollar staying firm and Treasury yields holding high, bullion struggled to find upward momentum.
On the domestic front, gold prices dropped 0.3% to settle at Rs 143,705. That reflects a decline of Rs 433 on the day. The pullback was mostly driven by the feeling that central banks might keep money tight for longer than many had hoped.
The Fed Stays Put, but Rate Worries Linger
The US Federal Reserve chose to leave interest rates steady at 3.75% to 4.00% during its October gathering. This pause came right after a 25-basis-point rate hike in September. Even though the central bank held rates flat, two policymakers actually wanted another rate hike right away. The Fed pointed out that American consumers are still spending and overall business activity looks sturdy, though global uncertainty makes future policy tricky to call.
Because interest rates could stay high for an extended run, analysts have trimmed their price targets. The forecast for gold in 2026 was pulled down to $4,495 per troy ounce from the previous call of $4,509. Still, market watchers expect prices to bounce back noticeably by 2027.
Physical Demand Picks Up in India and China
Even with price swings on the charts, physical buyers stepped back into the market. In India, local demand showed fresh life during the Dussehra festival. Festive buying pushed gold premiums up to $9 an ounce above official local prices, up from the $7 premium seen earlier.
Over in China, physical appetite was just as solid. Net imports through Hong Kong jumped more than 28% month-on-month in September to reach 74.987 tonnes, hitting a five-month high. At the same time, China's central bank added to its reserves yet again, stretching its official gold-buying run to 23 straight months.
Supply in key storage hubs also increased. Bullion sitting in London vaults rose by 1.96% month-on-month to hit 9,821 tonnes by the end of September. That massive hoard is now worth around $1.3 trillion.
Big Bank Targets and Global Risks
Wall Street giant Goldman Sachs is sticking to its long-term bullish call. The bank kept its end-2027 target at $5,400 per ounce, arguing that central banks buying gold to move away from dollar reliance will keep driving prices up. However, they did warn that if the Fed turns more aggressive, gold could slide toward $4,070 before starting a fresh run higher.
Beyond central banks, traders are glued to political friction involving Iran and Israel. Upcoming interest rate updates from both the Bank of Japan and the European Central Bank are also expected to sway currency markets and gold prices.
Technical Levels to Watch on MCX
From a chart perspective, gold is seeing long unwinding. Open interest slipped 0.2% to 15,591 contracts as buyers booked profits and stepped aside.
For the coming sessions, immediate downside support sits around Rs 143,240. If prices break below that mark, the market could test Rs 142,770. On the upside, sellers are waiting near the resistance band at Rs 144,260. A clear push above that ceiling could clear the way toward Rs 144,810.
Key Takeaways for Gold Traders
- Fed Policy Pressure:Strong US economic data and high yields continue to put a lid on aggressive gold rallies in the short term.
- Solid Physical Backing:Festive shopping in India and central bank accumulation in China give bullion a solid cushion against deep drops.
- Key Price Bands:Keep a close eye on the Rs 143,240 support and Rs 144,260 resistance levels to gauge the next big breakout.