Gold prices found strong footing this week, rebounding above $4,300 per ounce after briefly testing the key $4,000/oz support zone, according to a report by Business-Today. The recovery was driven by the interim US-Iran peace agreement, which shifted market focus from war to economics and triggered a decline in crude oil prices and inflation expectations. Lower Treasury yields and a softer US dollar further supported bullion, with spot gold recovering above $4,300/oz from a sharp correction earlier in the month.
Market Dynamics Shift from Geopolitics to Macro Data
Vedika Narvekar, Research Analyst - Commodities & Currencies at Anand Rathi Shares and Stock Brokers, said that gold prices are holding strongly and central bank buying is likely to continue supporting the yellow metal. The market narrative has pivoted from geopolitics to inflation and interest rates, with investors closely watching whether lower energy prices translate into softer inflation readings. The spotlight this week is on the June 16-17 Federal Reserve meeting and its updated economic projections and policy guidance. Investors will also monitor US inflation data and the formal signing of the US-Iran agreement in Switzerland. Any indication that inflation is moderating and the Fed is moving closer to rate cuts could further support gold, while a hawkish tone may cap gains and trigger renewed profit-taking.
Supply-Side Support: Central Bank Purchases and Sovereign Buying
Despite the improvement in sentiment, strong central bank purchases continue to provide a structural tailwind for prices. However, recent data suggests sovereign buying becomes more price-sensitive at elevated levels. Lower oil prices and the reopening of the Strait of Hormuz have eased immediate inflation concerns, but the lagged impact of earlier energy disruptions and sticky core inflation suggest the Fed is likely to remain cautious rather than aggressively dovish. This should keep real interest rates range-bound and limit downside pressure on gold. As long as inflation remains contained and growth momentum softens gradually, gold is expected to remain well supported, with any corrections likely to attract strategic buying.
Technical Outlook and Key Levels
| Product | Current Price | Support Levels | Resistance Levels |
|---|---|---|---|
| Gold (Spot) | $4,320/oz | $4,150 / $4,020 | $4,390 / $4,620 |
| Gold (MCX) | ₹1,54,700 (approx. from resistance) | ₹1,46,200 / ₹1,41,700 | ₹1,54,700 / ₹1,62,800 |
The CMP (current market price) for spot gold is $4,320/oz, with immediate support at $4,150/oz and $4,020/oz, and resistance at $4,390/oz and $4,620/oz. On the Multi Commodity Exchange (MCX), support is at ₹1,46,200 and ₹1,41,700, while resistance is at ₹1,54,700 and ₹1,62,800.
Silver Follows Gold’s Lead
Silver has also recovered sharply, with recent wild moves from $75 to $61.50 and back to $70. These fluctuations were driven more by macro-economic fears and market sentiment than by any deterioration in physical supply-demand fundamentals, according to the report. Inventories in exchange vaults increased because silver was delivered to settle futures contracts, not because miners suddenly produced too much metal. With the US-Iran peace framework easing energy-market fears and markets scaling back expectations of further rate hikes, silver has already recovered. The bigger picture remains unchanged: global demand continues to exceed supply, and 2026 is expected to mark the sixth consecutive year of a supply deficit. If investor sentiment improves further, the temporary easing in the physical market could reverse and tighten again.
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