Gold prices fell by 0.68%, settling at ₹71,426 amid mixed U.S. jobs data that raised uncertainty over the scale of an anticipated interest-rate cut by the Federal Reserve. The U.S. economy added 142,000 jobs in August, below expectations of a 160,000 increase, and the payroll count for the previous month was revised downward by 25,000. This capped a week of disappointing labour market data, with similar downward surprises from the ADP (NASDAQ:ADP), Challenger, and JOLTS reports. Despite this, comments from Fed officials like San Francisco Fed President Mary Daly and Chicago Fed President Austan Goolsbee suggested that rate cuts could be on the horizon, citing slower inflation and economic growth as justifications.
On the global demand front, gold discounts in India surged to a seven-week high as high prices hurt consumer demand. Indian dealers offered discounts of up to $13 per ounce, an increase from last week's $8 discount. In China, demand remains weak amid record prices, with discounts reaching up to $8. Meanwhile, gold in Singapore and Japan traded at par or with modest premiums of up to $2.20 and $0.50, respectively. The World Gold Council reported a 5% drop in India's gold demand in Q2 2024, but demand is expected to improve in the second half due to a correction in local prices following the recent reduction in import taxes.
Technically, the market is under long liquidation, with open interest dropping by 2.12% to settle at 15,037 contracts. Gold prices are now supported at ₹71,015, with a potential test of ₹70,610 if this level is breached. Resistance is seen at ₹72,030, and a move above this could push prices towards ₹72,640.