Gold prices experienced a decline of 0.59%, settling at Rs 1,51,761. This downturn can be attributed to the strengthening of the U.S. dollar and increasing crude oil prices, both of which have intensified inflationary concerns and diminished the attractiveness of the metal. Market sentiment exhibited a cautious demeanor as U.S.-Iran negotiations faced stagnation, with ongoing tensions following Iran’s seizure of vessels in the Strait of Hormuz and a lack of discernible advancement in peace discussions. While the U.S. indicated an indefinite extension of the truce, uncertainty regarding its effectiveness maintained elevated volatility.
Increasing energy costs have heightened anticipations of a more stringent monetary policy, thereby exerting additional pressure on gold. In March, Swiss gold exports experienced a notable increase of 30% month-on-month, primarily propelled by heightened shipments to the UK and China. Conversely, shipments to India saw a significant decline, attributed to weakened demand and import restrictions. Domestic demand in India exhibited weakness in the lead-up to Akshaya Tritiya, as elevated prices deterred retail purchases.
Meanwhile, premiums in China remained stable, although indications of a potential softening were observed. Central bank demand persisted in offering a degree of underlying support, as evidenced by China’s addition of 160,000 ounces to its reserves in March, which signifies its 17th consecutive month of acquisitions. Across the globe, central banks continued to be net purchasers, although certain nations decreased their holdings to bolster their currencies. In the interim, India’s gems and jewellery exports have fallen to a five-year low, indicative of diminished demand from the U.S. as a result of tariff pressures.
From a technical perspective, the market is experiencing long liquidation, as evidenced by a 0.5% decrease in open interest, bringing it down to 8,291. Immediate support is identified at Rs 1,51,015, with potential further decline to Rs 1,50,275, while resistance is positioned at Rs 1,52,750. A breakthrough past this level may drive prices up to Rs 1,53,745.