Gold prices experienced a notable recovery, closing with an increase of 1.74% at Rs 1,38,120, bolstered by anticipations of additional US interest rate reductions in 2026 and ongoing demand for safe-haven assets. The metal has experienced a remarkable increase of nearly 65% over the past year, with momentum intensifying following the imposition of broad global tariffs by the US administration starting in late April. Persistent geopolitical risks, notably the escalating tensions surrounding Russia–Ukraine and the intensified US enforcement measures against Venezuela’s oil trade, remain fundamental in sustaining investor demand for gold.

Minutes from the December FOMC meeting indicated an increasing willingness among policymakers to consider monetary easing should inflation persist in its decline, bolstering optimistic sentiment despite the ambiguity surrounding the timing of potential rate reductions. Physical demand exhibited indications of recovery. In November, China’s net gold imports through Hong Kong surged to 16.16 tonnes, more than doubling from previous levels, as gold resumed trading at premiums in major consumer markets.

In India, dealers imposed premiums reaching $15 per ounce after a period of discounts, indicative of a resurgence in retail demand following a correction from previous record highs. The purchasing activity of central banks continued to be strong, as the People’s Bank of China prolonged its buying streak to a thirteenth consecutive month, while global central banks collectively increased their holdings by a net 53 tonnes in October.

From a technical perspective, the market is experiencing short covering, evidenced by a 4.06% decrease in open interest to 14,945, coinciding with a significant price increase of Rs 2,359. Gold establishes a support level at Rs 1,36,850, with a more substantial support area located around Rs 1,35,585. On the upside, resistance is observed at Rs 1,38,830, and a breakout above this level could propel prices toward Rs 1,39,545.