Gold prices in India fell on Wednesday, with the price per gram dropping to 13,905.88 Indian Rupees (INR) from 13,925.55 INR the previous day, and the price per tola decreasing to 162,195.40 INR from 162,424.90 INR, according to FXStreet data [1]. Internationally, Gold (XAU/USD) struggled to maintain its modest Asian session gains and remained vulnerable near the $4,500 psychological mark, as persistent geopolitical uncertainties, particularly involving Iran and the US, continued to support the US Dollar [2].
US forces conducted self-defense strikes on southern Iran on Monday, targeting missile sites and boats, which Iran condemned as a violation of a ceasefire in place since early April. The Islamic Revolutionary Guard Corps (IRGC) asserted Iran's right to retaliate, and Iranian Supreme Leader Mojtaba Khamenei stated that regional countries would no longer serve as protective zones for US military bases. These developments have kept the geopolitical risk premium elevated, further underpinning the US Dollar and weighing on Gold prices [2].
Inflationary concerns have also contributed to expectations of more hawkish central bank policies globally. The Reserve Bank of Australia (RBA) raised interest rates in May, and the European Central Bank (ECB), Bank of Japan (BoJ), and Reserve Bank of New Zealand (RBNZ) are anticipated to hike rates by year-end. Traders are currently pricing in about a 50% chance of a US rate increase by December, which has provided additional support to the USD and limited upside for non-yielding assets like Gold [2].
From a technical perspective, Gold remains mildly bearish in the near term after failing to break above the $4,580 resistance level, which aligns with the 100-period Exponential Moving Average (EMA) on the 4-hour chart [2]. With no significant US economic data scheduled for release on Wednesday, market participants are expected to focus on comments from Federal Open Market Committee (FOMC) members and developments in the Middle East, while awaiting the US Personal Consumption Expenditures (PCE) Price Index and the second estimate of US GDP on Thursday [2].
CONCLUSION
Gold prices have declined both in India and internationally, pressured by a stronger US Dollar amid ongoing geopolitical tensions and expectations of tighter monetary policy. The market remains cautious, with attention turning to upcoming US economic data and further developments in the Middle East. The current environment favors a bearish outlook for Gold in the near term.