Gold prices experienced an increase of 1.33%, closing at Rs 144,430. This rise was bolstered by a resurgence in safe-haven demand amid escalating geopolitical tensions between the US and Iran, alongside investor attention on remarks made by the newly appointed Federal Reserve Chair Kevin Warsh. Warsh observed that inflation risks have diminished in recent weeks, yet he reiterated the Federal Reserve’s dedication to achieving its 2% inflation target. He also confirmed the Fed’s departure from conventional forward guidance, although markets persist in expecting additional US interest-rate increases this year in light of a robust labour market.
According to the CME FedWatch Tool, traders currently assign nearly a 67% probability of a rate hike by September. Additionally, Cleveland Fed President Beth Hammack has expressed support for tighter policy should inflation remain elevated. In the physical market, Indian gold experienced a premium for the first time in almost six weeks, as recent price corrections stimulated buying activity, even amid generally subdued demand.
In contrast, Chinese bullion persisted in trading at discounts, while the People’s Bank of China prolonged its gold reserve acquisitions for a 19th consecutive month, despite a 38% decline in net gold imports through Hong Kong in May. London vault holdings rose by 0.21% to reach 9,392 tonnes, with a valuation of around $1.4 trillion. Meanwhile, the World Gold Council reported global gold ETF net outflows of $2 billion in May, which reduced assets under management to $604 billion and total holdings to 4,121 tonnes. However, year-to-date inflows remain close to $17 billion.
Gold continues to exhibit fresh buying momentum, bolstered by a 2.75% increase in open interest, which suggests robust market participation. Immediate support is positioned at Rs 141,465, with subsequent support at Rs 138,495, while resistance is identified at Rs 146,490. A sustained move above this level could extend gains towards Rs 148,545.