Gold prices concluded the trading session with an increase of 0.4%, reaching Rs 140,906. This uptick was driven by bargain buying following recent declines, bolstered by Goldman Sachs’ projections regarding ongoing gold acquisitions by central banks. Despite the daily recovery, bullion experienced a weekly decline as rising geopolitical tensions between the United States and Iran drove up crude oil prices, heightening inflation concerns and bolstering expectations that the Federal Reserve may sustain a tighter monetary policy for an extended period.

Geopolitical developments continued to exert significant influence on market dynamics as Iran initiated new strikes on U.S. facilities in the Middle East in response to ongoing U.S. military operations. Rising tensions have intensified uncertainty regarding global energy supplies via the Strait of Hormuz, thereby elevating inflation expectations. Simultaneously, Federal Reserve officials embraced a more hawkish stance. Dallas Fed President Lorie Logan expressed her support for an interest rate hike, while Fed Vice Chair Philip Jefferson suggested that further tightening could be on the table if inflation does not show signs of moderation. CME FedWatch data currently indicates an almost 50% likelihood of a rate increase in September.

Economic data further supported the narrative of a robust U.S. economy. Industrial production experienced a modest uptick of 0.1% in June, whereas housing starts witnessed a remarkable surge of 19%, reaching an annualised rate of 1.427 million units, thereby surpassing market forecasts significantly. In physical markets, Indian gold discounts expanded significantly to $45 per ounce due to subdued jewellery demand, while Chinese premiums exhibited relative stability. London vault holdings rose by 0.77% to 9,464 tonnes, underscoring the ongoing trend of institutional gold accumulation.

From a technical perspective, gold experienced short covering, as open interest decreased by 11.49% while prices increased. Immediate support is positioned at Rs 140,120, succeeded by Rs 139,335. On the upside, resistance is observed at Rs 141,370, and a sustained breakout above this level could extend gains towards Rs 141,835, maintaining a cautiously positive near-term sentiment.