Gold prices fell by 1.01%, closing at Rs 143,376, as the U.S. dollar strengthened after the Federal Reserve’s recent policy meeting, where interest rates were maintained at their current levels. Fed Chair Kevin Warsh provided minimal insight regarding forthcoming policy, leading markets to lower their anticipations for a rate increase in September. According to CME FedWatch, the likelihood of a September increase has decreased to 67% from nearly 80% prior to the meeting. Meanwhile, U.S. Personal Consumption Expenditures inflation decreased by 0.1% month-on-month in June, representing the lowest reading since April 2020.
However, renewed geopolitical tensions in the Middle East may temporarily elevate inflationary pressures due to increased energy prices. Fundamentally, global gold demand held steady at 1,268.9 metric tonnes in the second quarter of 2026, bolstered by strong central bank acquisitions totalling 289 tonnes, effectively counterbalancing ETF outflows of 45 tonnes. Poland and China spearheaded official sector acquisitions, underscoring the ongoing trend of reserve diversification. China’s net gold imports through Hong Kong experienced a decline of over 5% in June, totalling 50.68 tonnes.
Meanwhile, physical demand in India has remained subdued as consumers anticipate a clearer direction in pricing. India’s gold demand for the June quarter decreased by 6% compared to the previous year, totalling 131.4 tonnes. Concurrently, net imports saw a significant decline of 23%, amounting to 98.1 tonnes, a consequence of the import tariff hike to 15%, which also stimulated a rise in unofficial inflows. However, the enhancement of physical premiums in China signalled a comparatively greater level of buying interest relative to other Asian markets.
From a technical perspective, the market experienced long liquidation, as open interest decreased by 0.34% to 9,348 contracts in conjunction with the significant price decline. Gold is presently underpinned at Rs 142,775, and a decline beneath this threshold is expected to exacerbate losses towards Rs 142,175. On the upside, immediate resistance is observed at Rs 144,100, and a sustained movement above this level could pave the way for a test of Rs 144,825.