Gold prices experienced an increase, closing up by 0.62% at Rs 152,699. This rise was supported by cautious optimism regarding potential advancements in U.S.-Iran negotiations, which in turn moderated aggressive safe-haven inflows. The prolongation of ceasefire agreements in the Middle East, coupled with the anticipation that diplomatic avenues will remain accessible, contributed to a stabilization of sentiment, despite the ongoing presence of fundamental geopolitical risks. At the macro level, the global economy is starting to experience the pressures of the energy shock induced by the conflict, characterized by increasing production costs and a deceleration of activity across various sectors.
Meanwhile, U.S. labor market data exhibited a general stability, with a modest increase in jobless claims, suggesting resilience in the face of mounting uncertainty. CME Group has made a significant move by lowering initial margins on COMEX gold futures, which may enhance liquidity and encourage greater participation in the market. Demand dynamics continue to serve as a fundamental pillar for gold. China’s gold imports experienced a significant increase, reaching 162 tonnes in March, marking the highest level in two years.
Concurrently, the central bank continued its purchasing trend for the 17th consecutive month, elevating total reserves to an unprecedented 2,313 tonnes. Physical demand in China exhibited notable strengthening, as premiums experienced a significant increase. Conversely, India experienced muted demand as a result of high prices, yet constrained supply conditions elevated domestic premiums to their peak levels in more than two months. In the realm of global trade, there has been a notable increase in Swiss gold exports, especially directed towards the UK and China, indicating a transformation in bullion flows.
Nevertheless, India’s imports experienced a downturn due to regulatory delays, while jewellery exports continued to be subdued as a result of challenges in global demand. From a technical perspective, the market is experiencing short covering, evidenced by a 2.59% decrease in open interest, despite an upward movement in prices. Immediate support is observed at Rs 151,245, with a breach below possibly challenging Rs 149,790. On the upside, resistance is positioned at Rs 153,660, and a breach of this level may lead to an extension of gains toward Rs 154,620.