Gold prices experienced a slight decline, closing 0.42% lower at Rs 142,517, as the demand for safe-haven assets diminished and the anticipation of a forthcoming U.S. Federal Reserve rate cut weakened. Geopolitical risk premiums have diminished as U.S. President Donald Trump indicated a potential postponement of military action against Iran, in light of Tehran’s reassurances concerning protesters and indications of reducing internal unrest.

Concurrently, robust U.S. economic data led investors to reduce their aggressive easing expectations, with markets now predominantly anticipating the initial Fed rate cut in July instead of June. This adjustment has kept near-term yields favorable for the dollar while exerting pressure on bullion. Notwithstanding the recent short-term correction, the overarching fundamentals continue to exhibit a constructive outlook. Gold holdings in London vaults increased by 2.24% month-on-month, reaching 9,106 tonnes, indicative of sustained institutional interest.

Major banks maintain an optimistic perspective regarding the medium-term outlook. Commerzbank has revised its 2026 year-end forecast to $4,900 per ounce, whereas HSBC and UBS anticipate prices may reach $5,000 per ounce in 2026, attributing this outlook to geopolitical risks, increasing debt levels, and persistent demand from central banks.  Physical demand exhibited a range of trends. Indian retail purchasing exhibited a lackluster performance attributed to high price levels, with merchants providing discounts reaching $12 per ounce, whereas Chinese demand maintained a stable trajectory in anticipation of the Lunar New Year.

From a technical perspective, the market is experiencing long liquidation, evidenced by a 2.95% decline in open interest. Gold exhibits a support level at Rs 141,390; a decline beneath this threshold could see prices approaching Rs 140,255. On the upside, resistance is observed at Rs 143,490, and a breakout could propel prices toward Rs 144,455.