Gold prices concluded the trading session with an increase of 0.65%, reaching Rs 159,547. This uptick was bolstered by a depreciating U.S. dollar and declining bond yields, following a drop in crude oil prices amid optimism regarding a possible reduction in tensions in the Middle East. Reports indicating that Israel and Lebanon have reached an agreement to implement a ceasefire have bolstered expectations for a wider diplomatic resolution involving Washington and Tehran, thereby enhancing risk sentiment throughout financial markets.
Investors are currently paying close attention to the forthcoming U.S. employment report, which may offer additional insights into the Federal Reserve’s monetary policy trajectory. In May, India’s physically backed gold ETFs experienced their inaugural monthly net outflow in a year, as investors opted to realise profits after the significant price surge. However, despite the recent outflow, cumulative ETF inflows continue to demonstrate resilience in 2026. In April, Swiss gold exports experienced a significant decline, primarily attributed to reduced shipments to the UK and China. Conversely, there was an uptick in exports to India and Hong Kong. Central bank demand remains a robust source of long-term support, as Goldman Sachs has increased its forecast for official sector purchases, anticipating continued buying through 2026 in light of persistent geopolitical uncertainties.
Physical demand has continued to exhibit a lacklustre performance across key Asian markets. Indian dealers raised discounts as elevated prices and import duties deterred purchases, while premiums in China contracted owing to subdued buying interest. Meanwhile, the World Gold Council reported that India’s investment demand surpassed jewellery consumption for the first time on record in the March quarter, underscoring a robust investor preference for the metal. In the first quarter, global gold demand experienced a year-on-year increase of 2%, primarily fuelled by robust investment activity and acquisitions by central banks.
Technically, the market is experiencing renewed buying interest, as evidenced by a 0.86% increase in open interest, reaching 8,311 contracts. Gold has immediate support at Rs 158,690, with a break below this level potentially testing Rs 157,840. On the upside, resistance is observed at Rs 160,400, and a sustained move above this level may lead to further gains toward Rs 161,260.