Gold prices experienced significant downward pressure, falling 1.9% to close at Rs 1,53,025, as robust U.S. producer inflation data bolstered expectations for a continued hawkish approach from the Federal Reserve. A 0.7% increase in wholesale prices has driven Treasury yields closer to 4.2%, bolstering the dollar and raising the opportunity cost associated with holding non-yielding assets such as gold.

Notwithstanding the downturn, fundamental support continues to be upheld by ongoing geopolitical tensions in the Middle East. The ongoing conflict and disturbances in the Strait of Hormuz are perpetuating a demand for safe-haven assets, thereby enabling gold to uphold a year-to-date increase of approximately 16%. However, markets are currently attentive to the Federal Reserve’s policy outlook, especially indications regarding the timing of possible rate cuts in 2026.

Trends in the physical market exhibit a mixed outlook. In India, gold was traded at significant discounts—reaching as much as $83 per ounce, marking the widest gap in nearly a decade—attributed to subdued demand. Conversely, China experienced robust buying interest, as premiums increased to $20–$30 per ounce, bolstered by ongoing central bank acquisitions.

On the technical front, the market is experiencing long liquidation, as evidenced by a 5.73% decline in open interest to 7,406 lots, alongside a price decrease of Rs 2,960. Immediate support is identified at Rs 1,51,025, with additional downside potential toward Rs 1,49,025, while resistance stands at Rs 1,55,550; a breach above this threshold could propel prices toward Rs 1,58,075.