Gold prices concluded the trading session down by 0.58% at Rs 158,679, influenced by a robust US dollar and escalating crude oil prices, which heightened inflation apprehensions and bolstered anticipations of a more stringent monetary policy from the Federal Reserve. Market sentiment weakened following remarks from Federal Reserve Governor Christopher Waller, who indicated that the central bank ought to eliminate its easing bias from policy guidance and be ready for a potential rate hike should inflation persist above the Fed’s 2% target. Minutes from the latest Federal Reserve meeting indicated that most policymakers still consider another rate increase possible later this year if inflationary pressures persist.

Geopolitical developments surrounding US-Iran negotiations persistently shaped safe-haven sentiment. Tehran’s acknowledgement that the latest US proposal has reduced disparities between the two parties is noteworthy; however, the directive from Iran’s Supreme Leader to maintain the enriched uranium stockpile within national borders has introduced complexities to the peace process, sustaining a heightened level of uncertainty. Increased crude oil prices associated with tensions in the Middle East have also bolstered inflation expectations on a global scale. Fundamentally, the demand for gold from central banks continued to serve as a robust supportive factor.

Goldman Sachs has significantly increased its forecast for official gold purchases, now projecting that central banks will acquire nearly 60 tonnes each month through 2026, driven by continued efforts in reserve diversification. Meanwhile, the World Gold Council reported that India’s investment demand for gold surged 52% year-on-year during the March quarter, surpassing jewellery consumption for the first time on record. Global gold demand increased by 2% in the first quarter, driven by robust investment and central bank purchases, which compensated for a decline in jewellery demand.

Physical demand in India has remained subdued, influenced by elevated import duties and price volatility, although discounts have narrowed from the record levels observed earlier. From a technical perspective, the market is experiencing long liquidation, evidenced by a 3.47% decrease in open interest to 5,598 lots, alongside a price decline of Rs 927. Gold is maintaining support at Rs 158,020, with a probable decline towards Rs 157,365, while resistance is identified at Rs 159,415 and Rs 160,155 levels.