Gold prices increased by 0.65% to close at Rs 1,52,657, bolstered by a reduction in market stress following the U.S. indication of a ceasefire extension with Iran, which alleviated immediate liquidation pressures and contributed to a depreciation of the dollar. Although the extension has enhanced general risk sentiment, ambiguity persists regarding the likelihood of all parties reaching consensus on extended peace negotiations. Simultaneously, remarks from Federal Reserve nominee Kevin Warsh underscoring the importance of policy independence contributed to market stability.
Nonetheless, the increase in gold prices was constrained by robust economic indicators from the U.S., as retail sales experienced a rise of 1.7% in March, reflecting strong consumer demand and diminishing the allure of safe-haven assets. In terms of physical metrics, Swiss gold exports experienced a significant 30% increase month-on-month, propelled by heightened shipments to the UK and China. Conversely, exports to India saw a marked decline, attributed to sluggish domestic demand and various import-related challenges.
Indian demand exhibited a lackluster performance in anticipation of Akshaya Tritiya, attributed to high price levels, while premiums in China remained largely stable. Central bank activity persisted in delivering structural support, as China increased its reserves by 160,000 ounces in March, signifying the 17th consecutive month of acquisitions. On a global scale, central banks continued to be net purchasers, although certain entities, such as Turkey, reduced their holdings. In the interim, India’s gems and jewellery exports have declined to a five-year low, indicative of diminished demand from the U.S. in the context of tariff pressures.
From a technical perspective, the market is experiencing short covering, as evidenced by a 3.78% decline in open interest, bringing it down to 8,333. Immediate support is identified at Rs 1,52,000, with additional downside potential to Rs 1,51,350, whereas resistance is established at Rs 1,53,500. A breakout above this level may propel prices toward Rs 1,54,350.