Gold prices remained under severe pressure on Wednesday after suffering their steepest monthly decline since 2008, with analysts cautioning that the precious metal could witness further downside. According to Kotak Securities, MCX Gold August futures are likely to find immediate support around Rs 1.37 lakh, followed by Rs 1,40,039 and Rs 1,40,713. In the international market, spot gold has support at $3,846.3 per ounce, followed by $3,923.5 and $3,947.4. The decline comes as the US dollar strengthened and investors increased bets that the US Federal Reserve could keep interest rates higher for longer. Spot gold extended losses for a third consecutive session, slipping below the $4,000-an-ounce mark to its lowest level since November. Silver also weakened, with spot prices falling to around $58 an ounce, while Brent crude slipped below $72 a barrel and West Texas Intermediate (WTI) hovered near $68 after registering their steepest quarterly decline since the pandemic.
The Directorate General of Foreign Trade (DGFT) has announced that importers granted tariff rate quota authorisation to import gold under the India-UAE free trade agreement during FY 2025-26 have been given more time to utilise those licences. According to the government order, the validity of TRQ authorisations for gold import stands automatically extended up to September 30, 2026. The DGFT stated that no separate application, composition fee, amendment or endorsement is required to avail this automatic extension of TRQ authorisation. Gold imports from the UAE dipped 9 per cent to USD 15.4 billion in 2025-26 from USD 16.83 billion in 2024-25, though this remains significantly higher than the USD 7.64 billion imported in 2022-23 and USD 3.08 billion in 2021-22. India's total gold imports last fiscal was about USD 72 billion, a jump of 24 per cent year-on-year, from USD 58 billion in 2024-25.
India and the UAE implemented a comprehensive economic partnership agreement (CEPA) in May 2022. Under this pact, India agreed to import up to 200 metric tonnes of gold annually from the United Arab Emirates with a one per cent tariff or duty concession under a tariff rate quota. The agreement provides significant cost advantages for gold imports from the UAE compared to other international sources.
The decline in precious metals is attributed to several key factors according to Kotak Securities. Cleveland Federal Reserve President Beth Hammack said interest rates may need to rise further as inflation remains above the central bank's target. Market participants are now awaiting remarks from Federal Reserve Chair Kevin Warsh and this week's US employment data for further clues on the policy outlook. Adding to the pressure on bullion, progress in US-Iran negotiations has eased geopolitical concerns, reducing demand for safe-haven assets. Stable US job openings data also reinforced expectations of a resilient economy capable of withstanding tighter monetary policy. However, Kotak Securities noted that any deterioration in US economic data or a renewed escalation in geopolitical risks could revive safe-haven buying.
In a separate trade notice, the DGFT announced it has sought details from exporters who were issued authorisation to export wheat flour and related items. The competent authority has decided to undertake a review of the utilisation of quantities already allocated and assess the requirement for further allocation of unutilised quota. Exporters must submit utilisation certificates issued by a Chartered Accountant indicating the quantity exported against the allocated authorisation till June 30, 2026, along with shipping bill details and copies of valid export contracts/purchase orders if available.
