Gold prices experienced a decline of 0.8%, settling at Rs 1,56,803, as enhanced global risk sentiment bolstered equities and diminished the demand for safe-haven assets. Market participants are meticulously observing forthcoming U.S. economic data, which may offer additional insights into the Federal Reserve’s interest rate path. Market expectations are currently skewed towards the anticipation of two rate cuts occurring within this calendar year, as indicated.

Nonetheless, the decline in gold was constrained by a depreciating U.S. dollar, subsequent to reports indicating that China has recommended its banks reduce their exposure to U.S. Treasuries. Furthermore, China’s central bank has continued its gold purchasing activities for the 15th consecutive month in January, increasing reserves to 74.19 million fine troy ounces, with the total value of gold reserves reaching $369.58 billion. Physical market trends exhibited a varied performance.

In India, premiums have decreased significantly to $70 per ounce from last week’s $153, as volatility has negatively impacted demand. In contrast, Chinese premiums strengthened to $35 per ounce in anticipation of the Lunar New Year. China’s gold output in 2025 increased by 3.35% to 552.02 tons, whereas consumption declined by 3.57%, indicating a decrease in jewellery demand alongside robust investment purchasing.

From a technical perspective, the market is experiencing long liquidation accompanied by a slight decrease in open interest. Gold encounters immediate support at Rs 1,55,570; a decline below this level may lead to a test of Rs 1,54,335. Resistance is identified at Rs 1,58,470, with a breakout possibly aiming for Rs 1,60,135.