Gold prices increased by 0.92% to close at Rs 145,758, buoyed by disappointing U.S. employment figures, declining crude oil prices, and remarks from Federal Reserve Chair Kevin Warsh suggesting a recent alleviation of inflation risks. While Warsh reiterated the Fed’s commitment to achieving its 2% inflation target, he cautioned against anticipating a swift transition toward a more accommodative monetary policy. Market participants currently assign approximately a 62% probability of a Federal Reserve rate hike by September. Meanwhile, the U.S. economy added just 57,000 jobs in June, a figure that falls significantly short of expectations and the revised figure from the previous month.

However, the unemployment rate saw an unexpected decline to 4.2%, despite a weakening in labour force participation. On the physical market front, gold demand experienced a modest uptick in India, as prices shifted to a premium for the first time in six weeks following a correction that spurred buying activity. In contrast, demand in China has remained subdued, with bullion continuing to trade at discounts despite the People’s Bank of China extending its gold reserve purchases for a 19th consecutive month.

However, China’s net gold imports through Hong Kong experienced a significant decline during May. Central banks worldwide continued to bolster the market, increasing their official reserves by a net 41 tonnes of gold in May. London vault holdings experienced a modest increase, reaching 9,392 tonnes. In contrast, global gold ETFs faced net outflows amounting to $2 billion in May, primarily driven by withdrawals from Asia and North America. Nonetheless, year-to-date ETF inflows continue to show a robust positive trend.

Technically, the market is experiencing new buying interest, as open interest has increased by 1.32% in conjunction with rising prices, suggesting a strengthening of bullish momentum. Gold has immediate support at Rs 144,125, with a break below this level potentially extending losses toward Rs 142,495. On the upside, resistance is observed at Rs 147,025, and a sustained move above this level could initiate additional gains toward Rs 148,295.