Gold prices declined by 0.43%, closing at Rs 1,53,943, influenced by a stronger dollar and increasing inflation worries associated with elevated oil prices. The persistent ambiguity surrounding U.S.-Iran peace negotiations has maintained a cautious stance in the markets, as geopolitical risks continue to shape investor sentiment.
Comments from Christopher Waller indicated that although the conflict might elevate inflation in the short term, a swift resolution could potentially allow for interest rate reductions later this year. On the macro front, U.S. inflation has reached its highest level in nearly four years, heightening concerns that interest rates may remain elevated for an extended period. Simultaneously, the demand from central banks continues to serve as a crucial support element.
China has prolonged its gold acquisition for the 17th month in a row, as highlighted by the World Gold Council, which observes ongoing net purchases by central banks around the world. Trends in physical demand exhibit a mixed pattern. In India, purchases during Akshaya Tritiya were comparatively subdued owing to unprecedented price levels, although there was a slight uptick in investment demand. Chinese demand persisted at a steady yet subdued level, as stable premiums indicated a cautious approach from retail investors.
From a technical perspective, the market is experiencing new selling pressure, as evidenced by a 2.54% increase in open interest. Gold exhibits immediate support at Rs 1,53,040, with potential further decline towards Rs 1,52,145. On the upside, resistance is observed at Rs 1,54,590, and a movement above this threshold could propel prices toward Rs 1,55,245.