Gold prices concluded the trading session with a slight increase of 0.2%, reaching Rs 143,106. This uptick can be attributed to short covering, even as crude oil prices experienced a decline. Brent crude retreated from above $100 per barrel, alleviating immediate inflation concerns. However, geopolitical tensions persisted as U.S. President Donald Trump issued a warning of “major military punishment” against Iran and its Houthi allies in response to attacks on Saudi oil tankers in the Red Sea.
Market participants are currently directing their attention towards the upcoming U.S. Federal Reserve policy meeting scheduled for next week, where it is broadly anticipated that interest rates will remain stable. Traders are pricing in an 81% probability of a September rate hike, indicative of ongoing inflation concerns. Meanwhile, the European Central Bank opted to keep interest rates steady while adopting a hawkish posture, signalling the possibility of another rate hike in September. In the physical market, Swiss gold exports experienced a 3% decline in June, as diminished shipments to the UK and China counterbalanced the increased demand from India and Saudi Arabia.
India’s imports increased to 7.4 tonnes following a six-year low in the previous month. However, domestic demand continued to be lacklustre, with discounts expanding to as much as $56 per ounce in response to high prices. In contrast, there was an improvement in Chinese buying interest, with bullion trading at premiums ranging from $3 to $6 per ounce. London vault holdings rose by 0.77% to 9,464 tonnes at the close of June, whereas Russia’s official gold reserves experienced a decrease of 43.5 tonnes since the start of the year.
Gold is currently experiencing short covering, evidenced by a 6.41% decline in open interest alongside an increase in prices. The immediate support is positioned at Rs 142,075, succeeded by Rs 141,045. On the upside, resistance is observed at Rs 143,800, and a decisive breakout above this level could extend gains towards Rs 144,495, maintaining a cautiously positive near-term bias.