Gold prices experienced a downturn in the prior session, closing 1.15% lower at Rs 1,59,673, influenced by the strength of the U.S. dollar impacting bullion valuations. The dollar appreciated in value as geopolitical tensions escalated due to the continuing conflict in the Middle East, now in its sixth day. Reports of U.S. and Israeli strikes on Iranian targets, coupled with retaliatory missile attacks by Tehran on regional energy infrastructure, have maintained a state of tension in the markets.
Furthermore, the U.S. Treasury has confirmed that a 15% global tariff will be implemented this week, contributing additional uncertainty to the dynamics of global trade. On the demand side, there was a notable increase in China’s gold imports via Hong Kong. In January, net imports experienced a significant increase of 68.7% month-on-month, reaching 20.58 tonnes, while total imports rose by 30.4% to 36.54 tonnes.
China’s central bank has continued its gold-buying streak for the 15th consecutive month, underscoring sustained long-term demand. Following the Lunar New Year, physical demand in China exhibited notable strength, with gold trading at premiums of $12–$13 per ounce above global prices. Conversely, demand in India has weakened as escalating prices have led to discounts reaching up to $65 per ounce, marking the most significant reduction in ten months.
From a technical perspective, the market is experiencing long liquidation, as evidenced by a 2.75% decline in open interest to 7,894 lots, accompanied by a price decrease of Rs 1,852. Gold is presently encountering support at Rs 1,58,210, with the subsequent downside threshold positioned at Rs 1,56,745. On the upside, resistance is observed at Rs 1,62,140, and a breakout above this level could propel prices toward Rs 1,64,605.