India’s Gold Buyers Return as Prices Dip, But Rest of Asia Stays on Sidelines

Physical gold demand in India showed modest improvement this week as prices retreated from recent record highs, encouraging some retail buyers to return to the market. Gold prices in India fell to 99,838 rupees ($1,139.61) per 10 grams on Thursday after hitting an all-time high of 102,250 rupees last week. The pullback prompted Indian dealers to offer smaller discounts of up to $6 per ounce compared to $9 last week. However, demand remained sluggish in other major Asian markets including China, Hong Kong, Singapore, and Japan, where activity was described as “lacklustre” despite the price correction.

Markets on Edge: Trump-Putin Summit and Jackson Hole Could Upend Bull Run

Financial markets face several key events this week that could shake up the current bull run. The most anticipated is Friday’s summit between Presidents Trump and Putin in Alaska, aimed at ending the Ukraine war. Any peace agreement could boost European stocks and the euro while easing global inflation pressures. Meanwhile, Fed Chair Jerome Powell’s appearance at the Jackson Hole symposium in Wyoming poses risks, as any hints about September rate cuts could trigger market volatility. With 60% of global investors worried about stagflation, these events come at a critical time for markets hovering near record highs.

Producer Prices Jump Most in Three Years, Complicating Trump’s Push for Rate Cuts

US wholesale inflation surged in July by the most in three years, dampening hopes for aggressive Federal Reserve rate cuts in September. The Producer Price Index (PPI) data showed inflation accelerating through the economy, even as consumer prices remained relatively stable. This split between wholesale and consumer inflation has created uncertainty about Fed policy, with traders now seeing only a 90% chance of a September rate cut, down from certainty earlier in the week. The data highlights ongoing tensions between President Trump’s push for lower rates and the Fed’s concerns about inflation risks from tariffs.

Gold Bounces Friday But Can’t Escape Weekly Loss After Inflation Shock

Gold prices rose slightly on Friday, supported by a weaker US dollar, but are still heading for a 1.7% weekly decline. The drop came after Thursday’s producer price data showed the biggest increase in three years, reducing expectations for a large Federal Reserve rate cut in September. While consumer price data earlier in the week had briefly raised hopes for a bigger rate cut, the hotter producer prices and lower-than-expected jobless claims have traders scaling back those expectations. Gold typically benefits from lower interest rates since it doesn’t yield any income.

Weekly Gold Decline Follows Surge in US Wholesale Prices

Gold prices are set to decline this week after US wholesale inflation data came in higher than expected in July. The stronger inflation report reduced expectations for a Federal Reserve interest rate cut in September, with traders now seeing only a 90% chance of a cut versus full certainty earlier. Gold typically performs better when interest rates fall, so this shift in expectations pushed prices down. Despite the weekly loss, gold remains up over 25% for the year, supported by geopolitical tensions and central bank buying.