Gold prices extended gains yesterday, settling higher by 1.53% at Rs 1,52,862, bolstered by robust safe-haven demand in light of escalating tensions between the United States and NATO regarding Greenland. President Trump reaffirmed his commitment to asserting control over the Arctic island, explicitly not dismissing the possibility of employing force, thereby increasing geopolitical risk premiums. Investor anxiety was further amplified by uncertainty surrounding the Supreme Court’s impending verdict on the legality of Trump’s attempt to remove Federal Reserve Governor Lisa Cook, which has raised concerns regarding the independence of the central bank.

Moreover, a significant decline in Japanese government bonds has heightened concerns regarding global fiscal sustainability, further solidifying the “debasement trade” as investors shift their focus from fiat currencies and sovereign debt. Fundamental support continues to be strong, driven by ongoing purchases from central banks. Poland’s central bank has sanctioned the acquisition of an additional 150 tonnes of gold, whereas China’s central bank has prolonged its gold-buying streak to 14 months, bringing total purchases since late 2024 to approximately 42 tonnes.

Gold holdings in London vaults increased by 2.24% month-on-month, reaching a total of 9,106 tonnes, indicative of sustained institutional accumulation. Prominent financial institutions maintain a positive outlook, as Commerzbank, HSBC, and UBS forecast gold prices reaching $4,900–$5,000 per ounce by 2026, though they anticipate significant volatility in the market.

From a technical perspective, the market is experiencing short covering, evidenced by a 6.51% decline in open interest as prices increased to Rs 2,297. Gold exhibits support at Rs 1,50,135; a decline below this level may lead to a test of Rs 1,47,405. Conversely, resistance is identified at Rs 1,57,035, with a breach above this threshold potentially paving the way toward Rs 1,61,205.