Gold price outlook: Yellow metal prices cool 26% from record high: What are Indians buying this Dussehra, Diwali? - Livemint

AI desk brief

Gold is stabilising after a 26% pullback from its January record high, with spot at $4,145.22/oz and December futures at $4,164.70/oz as a softer dollar and lower Treasury yields lend support ahead of the Fed’s Oct. 27-28 meeting. FedWatch shows an 82% chance of no change at October’s meeting, while markets still price an 89% probability of a December hike, keeping rate expectations a key headwind for bullion.

Indian demand is shifting rather than disappearing: elevated prices are pushing households toward lighter jewellery, coins, bars and ETFs, while domestic ETF inflows reached ₹2,596.70 crore in August, the third straight month of inflows, and AUM rose to about ₹1.91 lakh crore backed by 121.3 tonnes of gold. Physical imports weakened sharply, falling to $2.3 billion in August, down 45% from July and 58% YoY, while domestic prices traded below import parity and the discount widened to $78/oz by Sept. 11.

Traders are watching the balance between festive/wedding-season buying and macro pressure from rates, inflation, Treasury yields and geopolitics. Market participants quoted in the piece see softer crude and lower yields as supportive, but a hawkish Fed or oil-price spike could cap the rebound; near-term Indian buying is being driven more by wealth-protection demand than by jewellery volume.