Gold prices experienced a significant increase, closing 2.91% higher at Rs 148,493, bolstered by a reduction in geopolitical tensions in the Middle East and rising anticipations that the U.S. Federal Reserve might postpone additional monetary tightening. A sharp decline in crude oil prices has alleviated inflation concerns. Concurrently, reports indicating that Iran is contemplating European assistance to clear mines from crucial shipping routes, along with ongoing discussions with Oman regarding maritime security, have contributed to an overall improvement in market sentiment. Saudi Arabia’s diplomatic efforts to contain regional tensions have also played a role in enhancing the risk environment.

Meanwhile, the U.S. dollar hovered close to a six-week low as traders scaled back their expectations for a September Fed rate hike, even as Kansas City Fed President Jeff Schmid emphasised that inflation continues to exceed the central bank’s target. Investors are currently anticipating the forthcoming U.S. jobs report for further insights into the Federal Reserve’s policy trajectory. Physical gold demand exhibited a varied pattern across key consuming regions. Indian buying remained muted as consumers anticipated a clearer indication of price trends, although discounts decreased to approximately $44 per ounce from the previous $56.

In China, the appreciation of the yuan has bolstered bullion premiums to a range of $5 to $8 per ounce, indicating a rise in demand. Gold holdings in London vaults rose by 0.77% month-on-month, reaching a total of 9,464 tonnes by the end of June, with an estimated value of around $1.2 trillion. The World Gold Council reported that India’s June-quarter gold imports declined 23% year-on-year to 98.1 tonnes, while demand slipped 6% to 131.4 tonnes as weaker jewellery purchases outweighed investment demand.

Globally, second-quarter gold demand exhibited stability, as robust central bank purchases counterbalanced ETF outflows. Gold maintains a strong bullish stance following renewed buying interest, evidenced by a 6.17% increase in open interest. Immediate support is positioned at Rs 145,910, with subsequent support at Rs 143,320, whereas resistance is identified at Rs 149,990. A sustained breakout above this level could extend gains towards Rs 151,480.