Gold prices concluded the session with an increase of 0.62%, reaching Rs 148,932. This rise was bolstered by increasing optimism regarding a possible peace agreement between the United States and Iran, which contributed to alleviating worries about sustained inflationary pressures and stringent monetary policies. Market sentiment was shaped by a blend of U.S. economic data, as weekly jobless claims increased to 229,000 for the week ending June 6, surpassing market expectations of 219,000 and suggesting a slight easing in labour market robustness.
Meanwhile, both producer and consumer inflation data for May exceeded expectations, with consumer prices reflecting the most rapid annual increase in almost three years, primarily propelled by rising energy costs. Gold remains under pressure due to high oil prices in the wake of the U.S.-Israeli conflict with Iran, as robust energy markets have bolstered expectations for increased interest rates. Currently, market participants assign a 69% probability to a potential U.S. rate hike in December.
On the demand side, China’s central bank has continued its gold-buying streak for the nineteenth consecutive month, raising reserves to 74.96 million fine troy ounces as of May. Physical demand remained subdued in key Asian markets, particularly India, where buyers exhibited caution amid fluctuating international prices. India’s gold ETFs experienced their initial monthly outflow in a year as investors took profits, while global gold ETFs saw net outflows of $2 billion in May, primarily driven by withdrawals from Asia and North America.
From a technical perspective, the market is experiencing new buying interest, as open interest has increased by 0.29% to 9,385 contracts, accompanied by a price gain of Rs 915. Gold is presently finding support at Rs 147,060, and a breach beneath this threshold could lead to additional weakness targeting Rs 145,185. On the upside, resistance is observed at Rs 150,195, and a sustained move above this level could facilitate a rally toward Rs 151,455.