Yesterday, gold fell 0.2% to Rs 159080 as investor sentiment was still influenced by ongoing concerns about inflation and the uncertainty surrounding the Middle East war. After US President Donald Trump hinted at potential movement toward a peace deal with Iran, markets responded cautiously, but traders remained doubtful of any immediate settlement. Stronger-than-expected US inflation statistics also rekindled rumors that the Fed would still consider raising rates before the end of 2026 and lowered expectations for rate reduction this year.

For more guidance on monetary policy and economic activity, investors are now keeping a tight eye on future FOMC minutes and flash US PMI data. The underlying demand fundamentals for gold are still favorable despite the short-term pressure. Due to persistent geopolitical unpredictability and reserve diversification tendencies, Goldman Sachs increased its forecast for central bank gold purchases, currently projecting an average monthly purchase of about 60 tonnes through 2026. JPMorgan maintained a longer-term bullish outlook, projecting gold near $6,000 per ounce by the end of 2026 as investment demand recovers in the second half of the year.

However, it reduced its 2026 average gold price forecast from $5,708 to $5,243 per ounce. After the government raised import taxes on gold and silver to 15% from 6%, gold discounts in India expanded dramatically, thus decreasing the demand for jewelry and increasing scrap supplies. Dealers discounted official domestic prices by up to $207 per ounce. Nonetheless, investment demand in India continued to be robust; according to World Gold Council data, investment demand increased 52% year over year in the March quarter, overtaking jewelry consumption for the first time.

With prices falling by Rs 321 and open interest falling by 6.38% to close at 6487, the market is technically undergoing lengthy liquidation. Gold is seeing resistance at Rs 160050, with a move above expected to reach Rs 161015, and support at Rs 158270, below which prices may hit Rs 157455 levels.