Gold prices experienced an increase of 1.81%, concluding at Rs 154,817. This uptick was bolstered by a depreciating U.S. dollar and declining oil prices, which alleviated concerns regarding the persistence of elevated interest rates. Geopolitical tensions persisted as a significant factor, with the U.S. implementing a blockade of Iran’s ports. However, indications of ongoing diplomatic engagement between Washington and Tehran mitigated the extent of safe-haven spikes.
Expectations for a rate cut have strengthened, as markets now assign a 29% probability to a 25-bps cut this year, an increase from the 12% observed last week. On the macro front, U.S. CPI increased by 0.9% in March, resulting in an annual inflation rate of 3.3%, while core CPI saw a slight rise to 2.6%, suggesting persistent inflationary pressures. The minutes from the Federal Reserve indicated a hawkish stance, as certain policymakers expressed willingness to consider additional rate increases.
Meanwhile, China has prolonged its gold acquisition trend to 17 months, incorporating 160,000 ounces in March, underscoring persistent demand from the central bank. Physical demand exhibited a mixed pattern, as India experienced a modest uptick in buying driven by festival activities in anticipation of Akshaya Tritiya, whereas premiums in China diminished in response to a slowdown in retail demand.
The market is currently experiencing short covering, evidenced by a 2.45% decline in open interest, bringing it to 7,409. Gold establishes immediate support at Rs 153,360, while a downside test of Rs 151,910 remains a possibility. Resistance is observed at Rs 155,600, and a breakout above this threshold may propel prices toward Rs 156,390.