Gold prices fell by 1.33% to close at Rs 149,339, continuing their downward trend even amid ongoing geopolitical tensions in the Middle East. Rising risks in the Strait of Hormuz and ongoing conflict have propelled energy prices upward, amplifying global inflation worries. This has bolstered expectations that significant central banks might sustain high interest rates for an extended period, constraining gold’s potential for appreciation. Gold prices have notably decreased by around 13% since the conflict began, indicating that expectations for monetary tightening are currently overshadowing the demand for safe-haven assets.
Global gold demand demonstrated resilience, increasing by 2% year-on-year to 1,230.9 metric tons in the first quarter of 2026. Investment demand demonstrated a robust increase, particularly for bars and coins, rising 42% to 473.6 tons, reaching the highest level since 2013. Central bank purchases experienced a rise of 3%, with ongoing accumulation reinforcing long-term sentiment. China demonstrated significant investment demand, evidenced by a 67% increase in bar and coin purchases, alongside a rise in domestic market premiums to $16–$20 per ounce.
Meanwhile, India experienced muted demand as a result of fluctuating prices and a depreciating rupee, leading dealers to provide discounts instead of the prior premiums. On the supply side, gold holdings in London vaults increased to 9,339 tons, reflecting stable inventory levels. Furthermore, the relaxation of regulations surrounding gold imports in China is anticipated to enhance trade efficiency and bolster liquidity. Nevertheless, a significant 23% drop in global jewellery demand underscores the prevailing weak consumer sentiment in the face of elevated prices.
The market is currently experiencing new selling pressure, as evidenced by a 9.89% increase in open interest to 9,981 lots, alongside a price decline of Rs 2,013. Immediate support is identified at Rs 148,285, with potential further decline towards Rs 147,230. On the upside, resistance is positioned at Rs 150,870, and a breakout above this level could drive prices toward Rs 152,400.