Gold prices declined by 0.29% to close at Rs 141,850, as investors weighed the implications of easing U.S. inflation data against the backdrop of escalating geopolitical tensions in the Middle East. Softer-than-anticipated U.S. producer prices, coupled with subdued consumer inflation, have led to diminished expectations for further tightening by the Federal Reserve. However, concerns regarding inflation persisted at high levels due to increased crude oil prices in the wake of U.S. strikes on Iran, the reinstatement of a naval blockade on Iranian ports, and Tehran’s closure of the Strait of Hormuz.
Markets are currently reflecting an approximate 49% likelihood of a rate increase by the Federal Reserve in September, as Fed Chair Kevin Warsh reaffirmed the central bank’s dedication to managing inflation. Major financial institutions have adopted a more cautious stance regarding gold’s medium-term outlook. ANZ has revised its year-end gold price forecast to $4,600 per ounce and adjusted its 12-month target to $5,400. The institution cautions that ongoing expectations of tighter monetary policy may drive prices down to approximately $3,500, with potential support emerging in the range of $3,800 to $4,000. HSBC has revised its average gold price forecasts for 2026 and 2027 downward, attributing this adjustment to a robust U.S. dollar and expectations of a hawkish monetary policy.
Meanwhile, COMEX gold speculative net long positions decreased by 1,964 contracts to 114,854, indicating a reduction in bullish sentiment. Physical demand exhibited a mixed pattern, as Indian dealers provided discounts reaching $19 per ounce in the context of fluctuating prices. Meanwhile, China’s central bank continued its gold acquisition trend for the twentieth consecutive month, increasing its holdings by nearly 15 metric tonnes in June. London vault holdings also increased by 0.21% to 9,392 tonnes.
Gold is currently experiencing long liquidation, evidenced by a 4.31% decrease in open interest in conjunction with declining prices. Immediate support is positioned at Rs 140,920, with subsequent support at Rs 139,990. Resistance levels are identified at Rs 142,600 and Rs 143,350. Sustained movement beyond these levels is likely to determine the market’s near-term direction.