Gold prices increased by 0.26% to close at Rs 1,61,525, bolstered by robust safe-haven demand amid escalating geopolitical tensions in the Middle East. The intensification of air strikes involving the U.S., Israel, and Iran has increased uncertainty in global markets, leading investors to gravitate towards bullion. U.S. President Donald Trump suggested that military operations might extend for four to five weeks, heightening apprehensions regarding a prolonged conflict and its possible repercussions on the global economy.

On the demand front, China exhibited heightened physical buying interest. Data from Hong Kong’s Census and Statistics Department indicated that China’s net gold imports via Hong Kong surged by 68.7% in January, reaching 20.585 metric tons compared to 12.205 tons in December. Total imports via the route reached 36.544 tons, reflecting a month-on-month increase of 30.4%.

In the aftermath of the Lunar New Year holiday, physical gold in China was observed trading at premiums ranging from $12 to $13 per ounce above the global benchmark price, indicative of a resurgence in demand. Meanwhile, India experienced diminished demand as elevated prices led to dealer discounts reaching up to $65 per ounce. China’s central bank has maintained its gold-buying streak for a 15th consecutive month, underscoring persistent interest from central banks in the metal.

From a technical perspective, the market is experiencing short covering, as evidenced by a 5.3% decline in open interest to 7,687 lots, alongside a price increase of Rs 417. Gold exhibits immediate support at Rs 1,60,495, with additional support at Rs 1,59,465. Resistance is identified at Rs 1,63,300, and a breakthrough above this level could propel prices toward Rs 1,65,075.