Gold settled down by 0.15% at ₹84,444, pressured by a stronger dollar, though safe-haven demand remained intact amid geopolitical tensions and economic uncertainty. Weaker-than-expected U.S. services sector data fueled expectations of two Federal Reserve rate cuts in 2024, aligning with the latest FOMC projections. Meanwhile, ECB and BoC cut rates, with the BoC also ending quantitative tightening, while RBI and BoE are expected to follow suit this week. Gold’s safe-haven appeal received a boost after Donald Trump’s tariff threats, potential U.S. control over Gaza, and renewed interest in an Iran nuclear deal raised geopolitical concerns.
Additionally, worries over global economic growth due to the U.S.-China trade conflict further supported gold prices. However, record-high prices dampened physical demand in India, where dealers continued to offer discounts of up to $35 per ounce. In Japan, bullion traded between a $3.5 discount and a $1 premium, while trading activity in China and Hong Kong remained muted due to the Lunar New Year holiday. The World Gold Council (WGC) expects India’s gold demand in 2025 to moderate from last year’s nine-year high of 802.8 metric tons, with projected demand between 700-800 metric tons. While jewelry demand may decline, investment demand remains strong, particularly in ETFs, digital gold, and coins & bars.
Technically, gold is under long liquidation, with open interest dropping 4.14% to 17,126 contracts. Support is at ₹83,935, with a break below testing ₹83,430. Resistance is at ₹84,895, and a move above could see ₹85,350.