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Gold traded lower on MCX on August 31 amid heavy profit-taking and weak global cues. October gold futures fell 1.55% to Rs. 1,53,852 per 10 grams, and September silver futures declined 1.18% to Rs. 2,33,900.
Meanwhile, Brent crude futures rose 2.64% to USD 90.43 per barrel. US West Texas Intermediate (WTI) edged higher by 2.34% to USD 85.35 per barrel.
The CME FedWatch Tool indicates markets are currently pricing in a 40.1% probability that the Fed will keep rates unchanged and a 59.9% chance of a rate hike in September.
24K gold fell by Rs. 147 to Rs. 1,56,770 per 10 grams, while 22K gold also declined by Rs. 135 to Rs. 1,43,700. By city, Mumbai and Kolkata mirrored prices at Rs. 1,56,770, while Delhi was at Rs. 1,56,920 and Chennai at Rs. 1,56,770.
US gold prices extended declines on Monday, hitting their lowest in nearly two weeks after US Federal Reserve Chair Kevin Warsh signaled that interest rate hikes may be needed to contain inflation.
Spot gold fell 0.7% to USD 4,423.84 per ounce. US gold futures for December delivery declined 1.3% to USD 4,472.90.
Spot silver fell 0.5% to USD 66.01 per ounce, platinum declined 0.5% to USD 1,810.64 and palladium slipped 1.7% to USD 1,397.11.
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“Gold is still licking its wounds after the hawkish tone struck by Warsh at Jackson Hole,” said Tim Waterer, chief market analyst at KCM Trade.
“NFP has the potential to either extend gold’s post-Jackson Hole softness or provide the catalyst for a short-covering bounce,” Waterer added.
Technically, the market is under long liquidation, with open interest at 11,015 and over a 9.4% decline, indicating position unwinding rather than aggressive fresh short formation. Gold is currently finding support near Rs. 1,54,800, and a sustained break below this level could expose Rs. 1,53,300. On the upside, resistance is placed near Rs. 1,59,000, while a decisive move above this level could trigger a recovery toward Rs. 1,61,850.
