Gold prices experienced a notable decline of -1.12%, concluding at Rs 1,50,027. This downturn was influenced by increasing oil prices and heightened inflation worries, coinciding with the stagnation of US-Iran negotiations. The stagnation in diplomatic negotiations has intensified concerns regarding extended disruptions in energy supplies, thereby bolstering anticipations of a more stringent monetary policy. Gold generally serves as a hedge against inflation; however, increasing expectations for interest rates diminish its appeal as an asset that does not yield returns. Market participants are attentively monitoring the impending policy decision from the US Federal Reserve, anticipating a pause in action while bracing for a possibly hawkish rhetoric.
On the demand side, physical markets exhibited a range of signals. In March, China’s gold imports through Hong Kong increased by 3.5% month-on-month, reaching 47.866 metric tons, indicative of robust demand, while overall imports experienced a significant surge of nearly 25%. The People’s Bank of China has maintained its purchasing momentum for the 17th consecutive month, increasing reserves to 74.38 million troy ounces. In India, gold premiums have reached levels not seen in over two and a half months, driven by constrained supplies, which are partially attributed to delays in import authorizations.
Nonetheless, retail demand continued to be lackluster in the wake of the Akshaya Tritiya festival. Across the globe, central banks continued to be net purchasers, increasing their holdings by 25 tons in the initial two months of the year. In the interim, India’s gems and jewellery exports experienced a contraction of 3.3% in FY2025/26, with exports to the US witnessing a significant decline of 45%, indicative of trade disruptions and diminished demand.
Currently, the market is experiencing renewed selling pressure, as evidenced by a 5.44% increase in open interest to 9,192, suggesting the entry of new short positions. Gold is presently underpinned at Rs 1,48,540, with a breach beneath this level likely to challenge the Rs 1,47,050 mark. On the upside, resistance is observed at Rs 1,51,660, and a breakthrough could propel prices towards the Rs 1,53,290 levels.