Gold prices continued their upward trajectory, closing with an increase of 1.07% at Rs 1,57,699, bolstered by robust safe-haven demand in the context of rising trade and geopolitical tensions. New apprehensions surfaced following U.S. President Donald Trump’s warning of potential tariff increases on automobiles, lumber, and pharmaceuticals imported from South Korea, alongside a hike in duties on various other products to 25%, thereby reigniting global trade uncertainty.

While interest rates are anticipated to stay steady, market participants are keenly observing the remarks of Federal Reserve Chair Jerome Powell, particularly in light of increasing political pressure advocating for rate reductions. Bullion has experienced a rally of nearly 17% this year, supported by strong central bank purchasing, consistent inflows into ETFs, and a shift by investors towards real assets in light of fiscal and currency apprehensions. In December, China’s net gold imports through Hong Kong experienced a decline of 24% month-on-month, totaling 12.21 tonnes.

However, demand from the official sector remained robust, with the People’s Bank of China continuing its gold acquisition for the 14th consecutive month. Global investment interest remains robust, as leading financial institutions exhibit a growing optimism—Goldman Sachs, UBS, Commerzbank, and Deutsche Bank have all elevated their medium-term projections for gold prices.

From a technical perspective, the market is experiencing short covering, as evidenced by a 12.12% decrease in open interest to 9,403, coinciding with a significant price increase of Rs 1,662. Gold currently finds itself with immediate support at Rs 1,56,800; a breach of this level may lead to a test of Rs 1,55,905. Resistance is established at Rs 1,59,205, and a significant movement above this threshold could pave the way towards Rs 1,60,715.