Gold prices experienced a notable decrease of 1.96%, concluding at Rs 142,821. This decline can be attributed to escalating geopolitical tensions in the Middle East, which have heightened inflation expectations and raised the probability of a more stringent U.S. monetary policy. The Iran-backed Houthis asserted responsibility for assaults on two Saudi oil tankers, coinciding with the United States executing its twelfth consecutive night of strikes on Iran. This escalation raises apprehensions regarding possible interruptions to Gulf energy supplies.

The resulting surge in crude oil prices reinforced expectations that inflation could remain elevated, prompting markets to price in nearly a 78% probability of a Federal Reserve rate hike in September, thereby diminishing the attractiveness of non-yielding assets such as gold. In the physical market, Swiss gold exports experienced a 3% decline in June, driven by reduced shipments to the United Kingdom and China, which overshadowed the increased deliveries to India and Saudi Arabia. Exports to the UK decreased to 27.4 tonnes from 39.4 tonnes, while shipments to China declined to 27.9 tonnes from 31.6 tonnes.

In contrast, exports to India increased significantly to 7.4 tonnes from a mere 955 kg in May, while deliveries to Saudi Arabia saw a fourfold rise to 10.3 tonnes. Russia’s official gold reserves were recorded at 2,282 metric tonnes at the beginning of July, reflecting a decrease of 43.5 tonnes since the start of the year. Meanwhile, Indian gold discounts have expanded to a one-month peak due to lacklustre jewellery demand, while premiums in key Asian markets have remained relatively stable. London vault holdings experienced a month-on-month increase of 0.77%, reaching a total of 9,464 tonnes.

Technically, the market experienced long liquidation, as evidenced by a 9.06% decline in open interest, indicating profit booking following recent gains. Gold is maintaining immediate support at Rs 141,850, with a breach below this level likely to reveal Rs 140,880. On the upside, resistance is positioned at Rs 144,630, and sustained buying above this threshold could lead to further gains toward Rs 146,440.