Gold prices in India have declined as traders take profits after recent highs, influenced by expectations surrounding the US Nonfarm Payrolls report and a speech by Federal Reserve Chair Jerome Powell. As of today, gold is priced at 8,495.89 Indian Rupees (INR) per gram and 99,094.37 INR per tola.
Economic indicators reveal the US services sector has slowed, with the ISM Services PMI dropping to 50.8, while new unemployment applications have decreased to 219,000. The upcoming US NFP is expected to show an addition of 135,000 jobs, with the unemployment rate remaining at 4.1%.
Central Bank Gold Holdings And Influences
Central banks remain major gold holders, adding 1,136 tonnes to reserves worth around $70 billion in 2022, the highest annual purchase on record. Various factors influence gold pricing, including the strength of the US Dollar and geopolitical stability, with gold rising during economic uncertainty and lower interest rates.
What we’ve seen is a natural cooling in gold prices in India, following an extended spell of bullish movement. These declines in local pricing are not random but rather tied to traders booking gains after recent strong surges — a profit-taking phase emerging ahead of market-moving US data. Since global sentiment often echoes through the Indian market, the anticipation surrounding the US Nonfarm Payroll (NFP) report and Powell’s upcoming comments has encouraged a wait-and-see approach across speculative segments.
Breaking down the current figures, a price tag of 8,495.89 INR per gram places gold within a consolidation range after touching prior highs. Meanwhile, the tola metric – used widely in South Asian gold transactions – settles at 99,094.37 INR, still elevated historically, albeit softer in the short term. The pullback doesn’t suggest a reversal, but rather a technical breather as market participants digest wider economic cues.
The US data flow has carried mixed signals, which we interpret with caution. The ISM Services PMI, registering at 50.8, edged just above contraction territory. It implies flat growth in that sector, which is worth noting because services account for a large portion of US economic output. At the same time, fewer weekly jobless claims – now at 219,000 – suggest labour market resilience. These two metrics moving in opposing directions create some friction in short-term expectations.
Upcoming Job Numbers And Market Implications
Now to the upcoming job numbers. Forecasts are aligned towards a 135,000 increase, with the unemployment rate steady at 4.1%. Should this estimate materialise, markets could push back further on aggressive rate cut expectations, particularly if wage growth exceeds forecasts. For those of us tracking option premiums and volatility pricing, this jobs report holds weight. If results come in tighter than predicted, we may see a strengthening in the US dollar index and further softening in gold, at least temporarily.
Not to be overlooked is broader central bank behaviour – 1,136 tonnes of gold bought in 2022 puts institutional demand into perspective. This level of reserve-building reflects long-term thinking, largely unaffected by short-term speculative moves. It also offers a foundational layer of support beneath gold’s price, cushioning downside risk that might otherwise be steeper.
Geopolitical calm has helped ease demand for safe-haven assets in recent weeks. Yet that’s only one side of the coin. The prevailing interest rate trend remains the dominating lever. Lower rates reduce opportunity costs for holding gold, usually leading to increased asset allocation flows from institutional players. Hence, the dovish rhetoric or any deviation in tone from Powell’s address will be dissected thoroughly. Even slight nuances could change positioning in rate-sensitive assets and derivatives tied to gold and the US dollar.
From a shorter timeframe perspective, what matters now is how implied volatility is priced into the options chain going into the next US data cycle. We’re keeping close tabs on shifts in skew and open interest across key expiry zones. Traders may look to reassess delta exposure should Powell lean hawkish or if NFP surprises to the upside.
With all of this in mind, a reactive rather than predictive posture may serve best in the coming sessions. Taking cues from macroeconomic releases and the USD’s trajectory will help frame how gold-linked contracts are shaped. Let price-action guide adjustments. Stay nimble.
