Gold prices surged by 1.03% yesterday, settling at 76,390 as safe-haven demand strengthened amid escalating tensions in the Middle East and a decline in U.S. bond yields. Despite this rise, the metal remains below its recent record highs after Federal Reserve Chair Jerome Powell indicated that future rate cuts would likely be smaller, with a preference for quarter-percentage-point reductions. Goldman Sachs (NYSE:GS) has also revised its gold price forecast for early 2025, raising it to $2,900 per ounce from $2,700, citing rising ETF flows, interest rate cuts in Western economies and China, and increased central bank purchases.
Additionally, the probability of a 50-basis-point rate cut in November has dropped to 37%, down from over 50% the previous week. In China, net gold imports via Hong Kong plummeted 76% in August, marking the lowest level in over two years, as record-high prices curbed demand. This price rally has affected gold demand across key Asian markets, including China and India, where dealers have been offering significant discounts due to reduced appetite among buyers. In the Indian market, dealers offered a discount of up to $19 per ounce over official domestic prices, compared to last week’s $17 discount. China's discounts ranged from $16 to $7, while in Japan and Singapore, discounts and premiums fluctuated within small ranges.
Technically, the gold market is witnessing fresh buying, with open interest rising by 1.2% to settle at 17,183 contracts. Prices increased by 779, with gold finding support at 75,730, and a break below this could test 75,075 levels. On the upside, resistance is seen at 76,815, and a move above this level could push prices toward 77,245.