Gold experienced a rally of 1.24%, concluding at Rs 1,58,755. This movement was bolstered by a decrease in U.S. 10-year Treasury yields, which reached a near one-month low following disappointing core retail sales data and downward revisions for previous months. Softer economic readings have bolstered expectations that the Federal Reserve may consider rate cuts later in 2026, as markets are pricing in a minimum of two reductions of 25 basis points each.

However, Fed officials adopted a cautious stance. Dallas Fed President Lorie Logan underscored that additional cuts would necessitate evident weakness in the labor market. Cleveland Fed President Beth Hammack indicated that interest rates might stay unchanged for a prolonged duration as policymakers evaluate trends in inflation and economic growth.

On the demand side, China’s central bank has extended its gold-buying streak to 15 consecutive months, resulting in holdings of 74.19 million fine troy ounces. China’s total gold reserves increased to $369.58 billion. In 2025, despite a 3.57% decrease in total gold consumption in China, there was a notable increase in investment demand, evidenced by a 35% rise in bar and coin purchases, alongside a significant uptick in ETF holdings. In India, physical premiums have notably declined amid volatility, while in China, premiums have seen an increase in anticipation of the Lunar New Year.

The market is currently experiencing new buying activity, as evidenced by a 0.26% increase in open interest. Immediate support is identified at Rs 1,57,420, with subsequent support at Rs 1,56,085. Resistance is positioned at Rs 1,60,170, with a possible upward movement toward Rs 1,61,585 contingent upon a sustained breakout.