Gold prices experienced a decline of 0.92%, settling at Rs 157,616. This movement reflects the increasing expectations surrounding higher U.S. interest rates, coupled with ongoing inflation concerns that are tied to geopolitical tensions in the Middle East. Escalating uncertainty surrounding U.S.-Iran peace negotiations has led to a more than 3% increase in Brent crude prices, heightening concerns regarding inflationary pressures due to potential disruptions in the Strait of Hormuz shipping route. Market participants are currently factoring in a potential 25-basis-point increase in the Federal Reserve’s interest rate for December.

Federal Reserve Governor Christopher Waller expressed support for eliminating the “easing bias” from policy guidance, indicating a preference for sustaining elevated rates until inflation approaches the Fed’s 2% target. Despite short-term challenges, the underlying fundamentals for gold continue to be favourable in the long run. Goldman Sachs has significantly adjusted its forecast for central bank gold acquisitions, now anticipating an average of approximately 60 tonnes per month until 2026, driven by ongoing reserve diversification and geopolitical instability.

However, JPMorgan has revised its 2026 average gold forecast downward to $5,243 per ounce, attributing this adjustment to weaker short-term demand. Nonetheless, the bank maintains an expectation that prices will near $6,000 per ounce by the end of 2026. Physical demand trends exhibited a varied landscape across the principal consuming regions. In India, gold was observed trading at discounts reaching $78 per ounce, a development attributed to elevated prices and heightened import duties that have dampened jewellery demand. Investment demand, however, exhibited remarkable strength, increasing by 52% year-on-year in the March quarter, thereby exceeding jewellery consumption for the first time.

Global gold demand experienced a 2% increase in the first quarter of 2026, bolstered by heightened investment inflows and purchases by central banks. Technically, the market experienced long liquidation as open interest decreased by 7.71% to 4,562 lots. Gold is maintaining support levels at Rs 157,100 and Rs 156,580, with resistance identified at Rs 158,465 and subsequently at Rs 159,310.