Gold prices rose by 0.99% to settle at 77,411 as market participants anticipated a potential rate cut from the U.S. Federal Reserve. The dollar index eased from a recent high, following Donald Trump’s victory in the U.S. presidential election, which brought new market uncertainties. China’s central bank refrained from purchasing gold for the sixth consecutive month in October. Meanwhile, the Bank of England lowered its Bank Rate by 25 basis points to 4.75% in November, with 8 of the 9 MPC members supporting the cut, reflecting slowing UK inflation, which fell to a three-year low of 1.7% in September. Gold demand in India saw an uptick with festival purchases, though volumes were lower due to high prices.
Indian dealers charged a premium of up to $1 on Dhanteras, then offered discounts up to $5 later. Singapore saw premiums ranging from a $0.80 discount to a $2.20 premium, while Chinese discounts were between $11 and $14. Global gold demand, excluding OTC trading, remained steady year-on-year at 1,176.5 metric tons in Q3, with higher investment offsetting weaker jewellery consumption. The World Gold Council reported total gold demand, including OTC trades, rose 5% to 1,313 tons, a quarterly record. Notably, physically backed ETFs recorded inflows of 95 tons, while bar and coin investments fell by 9%. Gold jewellery consumption declined 12%, while central bank purchases dropped by 49%. On the supply side, mine production grew 6%, reaching a record level, and recycling increased by 11%.
Technically, gold is experiencing short covering, with open interest down 2.67% to 10,605 and prices up by 756 rupees. Support for gold is at 76,650, with further support at 75,895. Resistance is expected at 77,810, and a move above could see prices reach 78,215.