Gold prices concluded the trading session with an increase of 1.68%, reaching Rs 158,066. This uptick was largely driven by a depreciating U.S. dollar and a renewed emphasis on the interest-rate trajectory in anticipation of significant U.S. economic data set to be released this week. Sentiment was further bolstered following remarks from San Francisco Fed President Mary Daly, who characterized the U.S. labor market as being in a “precarious” state, suggesting that further rate cuts could be necessary.

On the geopolitical front, a reduction in tensions has positively influenced sentiment, as the U.S. and Iran have reached an agreement to continue discussions this week to prevent military escalation. Fundamental support was also derived from ongoing demand from central banks. In January, China’s central bank continued its gold acquisition for the 15th month in a row, increasing its holdings to 74.19 million fine troy ounces, accompanied by a significant rise in the value of its reserves.

Physical market dynamics exhibited a range of trends: gold premiums in India decreased significantly from decade highs due to volatility dampening purchasing activity, whereas a retreat from record prices bolstered demand in China in anticipation of the Lunar New Year. China’s gold ecosystem exhibits resilience, characterized by increased mine output, strong demand for bars and coins, and a significant uptick in domestic ETF inflows, notwithstanding a decline in jewellery consumption.

From a technical perspective, the market is experiencing short covering, evidenced by a 5.53% decline in open interest to 7,790, while prices have increased by Rs 2,615. Gold currently finds itself with immediate support at Rs 156,065; a breach of this level may lead to a decline in prices towards Rs 154,065. On the upside, resistance is observed at Rs 159,545, and a sustained move above this threshold may pave the way toward Rs 161,025.