As rising U.S. Treasury yields diminished the appeal of non-yielding metal, gold closed considerably lower by 1.77% at Rs 151,729, extending losses. U.S. Treasury yields have reached their peak since January 2025, driven by escalating tensions in the Middle East and resurfacing inflation worries, resulting in a worldwide bond selloff. According to the CME FedWatch Tool, markets are presently pricing a 66% chance of an interest rate hike later this month. Fed Chair Kevin Warsh stated that policymakers would have more work to do if they lacked confidence that inflation was returning toward the 2% target.
Investors are currently anticipating the ADP employment report and the forthcoming nonfarm payrolls data on Friday, seeking additional insights into the trajectory of the Federal Reserve’s monetary policy. Geopolitical risks are notably heightened as U.S. President Donald Trump has issued threats of additional strikes against Iran in response to renewed direct attacks. Concurrently, the immediate inflationary implications stemming from rising energy and commodity prices continue to be a significant concern. Physical demand has also shown signs of deterioration, as Indian gold discounts have expanded significantly to reach as much as $135 per ounce over official domestic prices, in contrast to $65 observed the previous week, indicating the most substantial discount in three months.
Market speculation regarding a potential reassessment of the recent hike in gold and silver import duties by the government has further dampened buying interest. In China, bullion was exchanged at discounts ranging from $2 to $5 per ounce, whereas Singapore, Hong Kong, and Japan maintained proximity to global benchmark prices. London vault holdings reached 9,464 tonnes at the end of June 2026, reflecting a month-on-month increase of 0.77% and valued at approximately $1.2 trillion, which is roughly equivalent to 757,145 gold bars.
Technically, the market is experiencing long liquidation, evidenced by a 3% decline in open interest to 11,288 contracts, alongside a price decrease of Rs 2,731. Gold is presently encountering support at Rs 150,495, and a breach beneath this threshold may lead to a further decline toward Rs 149,255. On the upside, resistance is positioned at Rs 153,880, and a sustained move above this threshold could initiate a recovery toward Rs 156,025.
