Gold prices experienced an upward movement in the previous session, concluding at Rs 1,61,634, reflecting a 1.23% increase, as rising tensions between the U.S. and Iran sustained the demand for safe-haven assets. The conflict has now reached its seventh day, characterized by Iran’s missile and drone assaults throughout the Gulf, notably targeting an oil refinery in Bahrain, as Israel escalates its airstrikes on Tehran.

In light of increased geopolitical tensions and the temporary closure of the U.S. embassy in Kuwait, global markets remain unsettled, leading investors to gravitate towards bullion as a safer asset. On the macro front, expectations for U.S. interest rate cuts have moderated, with markets now pricing in only one rate cut this year, compared to two anticipated earlier. Recent U.S. economic data demonstrated resilience, highlighted by a decline in jobless claims, an increase in productivity, a reduction in job cuts, and robust growth in the services sector.

This positive performance has bolstered the dollar and constrained the upward movement in gold prices. Trends in physical demand exhibited a mixed performance. Gold in China was transacted at premiums of $13–$15 per ounce, indicative of robust investment demand. In India, volatile prices have dampened buying interest, although discounts have tightened to approximately $28 per ounce as a result of supply disruptions stemming from regional airspace closures.

From a technical perspective, the market is experiencing short covering, as open interest has decreased by 6.47% to 7,383 lots, while prices have increased by Rs 1,961. Gold is presently encountering support at Rs 1,59,800, with the subsequent downside level positioned at Rs 1,57,965. On the upside, resistance is observed at Rs 1,62,990, and a sustained move above this level could propel prices toward Rs 1,64,345.