Gold retreats more than 7% from August peak; retail demand stays firm

As per the latest business developments, Gold has fallen 7.11 percent from the month's peak of $4,658 per ounce on August 25, hovering just above $4,327 on September 22. The precious metal is down 0.36 percent from its previous close, and 1.57 percent during the past week. That stated, gold stays 8.83 percent above its yearly low of $3,976 recorded on July 16, according to TradingEconomics.

The recent slide follows earnings-taking amid escalating US-Iran tensions and a stronger dollar. The US dollar traded at 95.65 against the Indian indian rupee in early session on Tuesday (Sept.22), as oil price marks rose 1.05 percent to $101.39 a barrel in futures trading. Investment and retail demand

The Augmont Bullion report (September 21) noted that investment demand looks healthier.

"Indian gold ETF inflows rose 67 percent in August to Rs 26 billion, and digital gold purchases are running near Rs 25 billion a month. Import duty stays at 15 percent. "With Dussehra in October and Diwali in early November, a dip toward Rs 1.50 lakh could bring buyers back. Market participants, in the meantime, are in a wait-and-see mood," the report stated.

The World Gold Council notes that festive jewellery buying, which began in late August, has cooled since the August price spike, while wedding demand stays steady.

"On September 11, domestic gold traded at a discount of around $78 per ounce to import parity, nearly 2 percent below landed cost, because old-gold exchanges are keeping supply ample. Wholesalers say jewellers aren't restocking," Augmont stated.

It further noted that spot gold is trading in a $4,250–$4,450 range with a bullish bias. "Buy on dips near backing and sell into rallies. A break above the upper resistance could open the way to $4,600–$4,700." Gold outlook in the near-term

Gold prices traded marginally elevated on Tuesday as oil price marks eased inflation concerns and reduced expectations for aggressive Fed tightening, while a softer dollar provided additional backing to bullion.

According to Manav Modi, Commodities Market observer at Motilal Oswal Financial Services, crude prices have fallen more than 9 percent over the previous four sessions as Saudi export flows improved and hopes increased for diplomatic progress between the US and Iran, reducing some of the energy-fuelled inflation pressure that contributed to the Fed’s recent interest-rate gain.

The Fed boosted interest rates by 25 basis points to 3.75–4.00 percent, as US core inflation increased more than anticipated in August. "Elevated US interest rates typically strengthen the dollar and raise the opportunity cost of holding non-yielding assets such as gold, while persistent inflation could limit the downside. That stated, softer energy prices could reduce the urgency for additional hikes if the trend persists," Modi stated.

In the meantime, Fed officials stay wary, with some policymakers indicating that persistent supply shocks cannot be ignored. In the meantime, President Trump signalled openness to meeting Iranian President Masoud Pezeshkian, supporting hopes of diplomatic progress, although Middle East tensions stay elevated.

"Attention stays on upcoming US-China talks, while movements in oil, Treasury yields, the dollar and real rates are likely to stay the key near-term drivers for gold," Modi stated.