Gold Rebounds As Lower Oil Prices Ease Inflation Fears Ahead Of US Midterm Vote

reports that gold settled 1.23% higher at Rs. 1,40,186 per 10 grams. The jump came after crude oil prices slipped, which cooled inflation worries and nudged investors toward the precious metal. At the same time, traders are watching the upcoming US midterm elections for clues on future fiscal policy.

Even with the bounce, upside looks capped. Persistent inflation pressures keep the market betting on more Federal Reserve tightening. US inflation quickened in September, and three Fed officials voiced support for extra rate hikes, cementing a roughly 75% chance of a December move.

Across the Atlantic, Europe’s inflation is also staying high, with the European Central Bank unlikely to hit its 2% goal before 2028. Physical gold demand in key Asian markets stayed muted. Indian buyers are holding off, hoping for cheaper prices, while Chinese appetite remains low.

Indian gold premiums fell to $7 per ounce from $9, and Chinese premiums narrowed to a range of 0‑9 dollars per ounce.

In China, net gold imports via Hong Kong rose 28% month‑on‑month to 74.987 tonnes in September, the strongest level in five months. The People’s Bank of China kept buying gold for the 23rd straight month. Meanwhile, gold stored in London vaults grew 1.96% month‑on‑month, reaching 9,821 tonnes at September’s end.

Goldman Sachs stuck with its 2027 gold price forecast of $5,400 per ounce, pointing to ongoing central‑bank diversification as a solid support. However, the firm warned that aggressive Fed tightening could pull prices down toward $4,070 before any recovery takes hold.

Technical Snapshot

The market is seeing short covering. Open interest slipped 1.38% to 16,142 contracts while prices climbed Rs. 1,701. Current support sits at Rs. 1,38,640, with a secondary level at Rs. 1,37,090. Resistance is placed at Rs. 1,41,130. A clean break above that could push the rally toward Rs. 1,42,070, whereas a drop below the first support may trigger more selling.

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Conclusion for Gold Traders

• Gold’s modest rebound is tied to falling oil and easing inflation fears, but further upside is limited by lingering price pressures.
• Watch US inflation data and Fed signals closely – a December rate hike remains likely.
• Key technical levels: support at Rs. 1,38,640 / 1,37,090; resistance at Rs. 1,41,130.
• International flows stay supportive: China’s import surge and growing London vault stocks add a bullish backdrop.
• Gold’s longer‑term outlook hinges on central‑bank buying and the Fed’s policy path.