Gold Prices Remain Choppy Amid Conflicting Pressures

Gold prices have been choppy in recent days due to conflicting pressures from safe-haven demand and rising interest rates. According to Vedika Narvekar, Research Analyst - Commodities & Currencies at Anand Rathi Shares and Stock Brokers, the lack of a dominant story has left gold reacting to fast-moving headlines instead of its own fundamental drivers.

The US Federal Reserve's decision to hike interest rates wasn't the main catalyst for gold price movements. Instead, news about Saudi Arabia restoring a key pipeline sent gold prices spiking by as much as 2.8% in one session. However, this gain was short-lived and faded once Fed officials flagged that inflation is broader than just an oil problem.

The Indian gold market has been cautious, with domestic prices trading below import parity and discounts widening sharply from $34/oz in July to $78/oz by mid-September. In contrast, global gold ETFs have seen inflows for nine straight weeks, with $4.24 billion coming in during the week to September 18 alone, over half of which came from the US.

Globally, China's demand for gold is striking, with imports through August already crossing 1,000 tons, beating all of 2025 in eight months, aided by cheaper prices earlier this year and a firmer yuan. The People's Bank of China (PBOC) has also bought the most gold since 2023, extending its buying streak to nearly two years.