Gold prices concluded the trading session with a slight decline of 0.19%, settling at Rs 156,037, as investors engaged in profit-taking following a period of reaching record highs. The overarching trend continues to be bolstered by diminishing confidence in U.S. assets, ongoing geopolitical tensions, and heightened global economic uncertainty. Market participants are incorporating a prudent Federal Reserve position, anticipating that rates will largely stay the same during the January meeting. Meanwhile, the prospect of two rate cuts in the latter half of 2026 continues to support sentiment in the bullion market.
The U.S. PCE inflation data largely aligned with expectations, bolstering the perspective of short-term policy stability. On the global front, geopolitical developments surrounding Greenland have alleviated immediate tariff concerns; however, uncertainty persists. The fundamentals of gold continue to exhibit strength, as evidenced by a 2.24% month-on-month increase in London vault holdings, indicating persistent investor interest.
Major banks have adopted a more optimistic outlook: Goldman Sachs, Commerzbank, HSBC, and UBS have all elevated their gold forecasts for 2026, attributing this shift to safe-haven demand, increasing debt levels, a weakening dollar, and a trend of private-sector diversification into gold. Central bank purchases persist as a fundamental component, spearheaded by China and Poland, underscoring ongoing accumulation by the official sector.
From a technical perspective, the market is experiencing long liquidation, evidenced by a 6.16% decrease in open interest concurrent with a price drop of Rs 304. Gold currently finds itself with immediate support at Rs 154,445; a breach of this level may lead to further declines towards Rs 152,860. On the upside, resistance is observed at Rs 158,420, and a sustained move above this level could pave the way toward Rs 160,810.