Gold prices experienced a notable rebound, increasing by 1.95% to close at Rs 153,708. This rise was bolstered by a depreciating dollar and a reduction in geopolitical tensions following Donald Trump’s suggestion that the conflict with Iran might de-escalate in the coming weeks. Nonetheless, in light of this optimism, persistent high energy prices maintain inflationary pressures, resulting in markets predominantly dismissing the possibility of any U.S. Federal Reserve rate reductions this year.

Jerome Powell upheld a prudent approach, underscoring that policymakers will evaluate the wider economic ramifications of the current tensions. On the demand side, central banks persist in delivering robust foundational support. China has prolonged its gold acquisition for 16 straight months, and Brazil has markedly augmented its reserves, underscoring persistent institutional demand.

The World Gold Council reports that central bank demand continues to be robust, albeit with a slight moderation attributed to increased prices. Physical demand trends exhibit a mixed landscape, as India experiences a slight uptick at reduced prices, whereas the narrowing of Chinese premiums suggests a decline in purchasing enthusiasm.

From a technical perspective, the market is experiencing short covering, as evidenced by a 0.32% decrease in open interest, bringing it down to 6,607 lots. Gold exhibits immediate support at Rs 151,680, with additional downside anticipated at Rs 149,660. On the upside, resistance is positioned at Rs 155,110, and a breakout above this threshold could propel prices toward Rs 156,520.