Gold prices increased by 0.62%, closing at Rs 148,118, bolstered by a decrease in Brent crude oil prices amid positive developments in U.S.-Iran negotiations. Senior officials from both countries concluded their first round of talks in Switzerland, with reports indicating constructive developments and a continuation of the earlier ceasefire framework. However, gains in bullion remained constrained as the U.S. Federal Reserve upheld a hawkish stance on monetary policy. Fed Chair Kevin Warsh reiterated concerns about inflation, which has bolstered market expectations for a rate hike later this year. Traders are now assigning an 89% probability to an increase in December.

Goldman Sachs has adjusted its year-end gold price forecast downward to $4,900 per ounce from a previous estimate of $5,400. This revision reflects near-term downside risks, although the firm continues to uphold a favourable long-term perspective. Physical demand has continued to exhibit weakness across the primary consuming regions. India’s gold imports experienced a significant decline of nearly 70% following an increase in import duties to 15%. Concurrently, Swiss gold exports to India fell sharply, reaching their lowest monthly level in six years. Domestic jewellery, bar and coin demand in India remained lacklustre despite recent price adjustments.

India’s physically backed gold ETFs experienced their inaugural monthly outflow in a year during May, as investors opted to realise profits. In May, gold ETFs experienced net outflows amounting to $2 billion, primarily driven by trends in Asia and North America. However, it is noteworthy that year-to-date flows continue to show a positive trajectory. In China, physical gold premiums have shifted to discounts, indicating a cautious investor sentiment in light of the uncertainty surrounding the U.S.-Iran agreement.

Technically, the market is experiencing short covering, as evidenced by a 0.66% decline in open interest to 9,286 contracts, coinciding with an increase in prices. Gold exhibits immediate support at Rs 145,740, with subsequent support at Rs 143,365. On the upside, resistance is observed at Rs 149,860, and a sustained movement above this threshold could potentially extend gains toward Rs 151,605.