Gold prices experienced a significant increase, closing at Rs 1,65,915, reflecting a rise of 5.21%. This movement can be attributed to a declining U.S. dollar and an escalation in geopolitical and policy uncertainties, which in turn enhanced demand for safe-haven assets. The dollar declined to a four-year low following indications from U.S. President Donald Trump expressing a preference for a weaker greenback to enhance export competitiveness. Continued policy ambiguity in Washington, characterized by revived tariff threats and scrutiny of the Federal Reserve’s autonomy, has further bolstered purchasing interest. Markets are currently anticipating the Federal Reserve’s policy decision, with expectations that interest rates will remain steady.

Attention is particularly directed towards forward guidance regarding possible future rate cuts. Investor appetite continues to exhibit strength, bolstered by significant central bank acquisitions and inflows into exchange-traded funds. China’s central bank has continued its gold acquisition for 14 consecutive months, increasing official reserves by 30,000 ounces in the previous month. Meanwhile, data from the World Gold Council underscore the persistent demand from the official sector as a significant factor supporting prices.

Prominent financial institutions have adopted a more optimistic outlook, as Goldman Sachs has elevated its end-2026 projection to $5,400 per ounce, while Deutsche Bank anticipates a price of $6,000 per ounce under a weak-dollar scenario. Gold stocks in London vaults increased by 2.24% month-over-month, reaching a total of 9,106 tons, indicative of robust institutional accumulation. Regionally, Indian gold premiums surged to levels not seen in a decade, driven by anticipations of an increase in import duties, whereas Chinese premiums stayed relatively subdued as global prices approached historic peaks.

From a technical perspective, the market is currently experiencing short-covering, evidenced by a 23.57% decline in open interest as prices surged to Rs 8,216. Support is identified at Rs 1,61,710; should prices fall below this level, they may approach Rs 1,57,505. Conversely, resistance is noted at Rs 1,68,310, followed by Rs 1,70,705.