Gold prices closed up by 0.14% at 62808, recovering some gains after a reaction to stronger-than-expected U.S. economic activity in the third quarter. The Bureau of Economic Analysis reported a growth rate of 5.2% between July and September, exceeding the previous estimate of 4.9%. Upward revisions to nonresidential fixed investment and state and local government spending were partially offset by a downward revision to consumer spending. Despite the robust economic data, there's a growing perception in the markets that a slowing economy could lead the Federal Reserve to cut interest rates in the first quarter of the next year.
The CME FedWatch Tool indicates a 45.5% chance of a rate hike in March, a notable increase from expectations seen the previous week. In top Asian hubs, there was some selling of physical gold as individuals capitalized on relatively high prices. Lackluster demand during the wedding season in India prompted dealers to offer steeper discounts, reaching up to $6 an ounce over official domestic prices compared to last week's $3 discounts. China's net gold imports via Hong Kong declined by about 23% in October compared to September, according to Hong Kong Census and Statistics Department data. Net imports into the world's leading gold consumer stood at 26.793 metric tons in October, down from 34.757 tons in September.
Technically, the gold market is under fresh buying, with a gain in open interest by 6.07% to settle at 17123. Support is identified at 62585, and a breach could test 62365, while resistance is likely at 62980, with a move above potentially leading to testing 63155.
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