Gold prices concluded the trading session with a slight decline of 0.13%, settling at Rs 161,978, as market participants kept a vigilant eye on the unfolding discussions between US President Donald Trump and Chinese President Xi Jinping. Market sentiment exhibited a degree of caution following Trump’s assertion that Xi had consented to provide Iran “with whatever” support was necessary, while Xi cautioned that disagreements regarding Taiwan could lead to increased geopolitical instability. Pressure on bullion has also arisen following stronger-than-anticipated US economic data, which has bolstered expectations that the Federal Reserve may maintain elevated interest rates for an extended period.

US import and export prices experienced their most significant monthly rise since March 2022, propelled by escalating fuel import expenses and increased non-agricultural export prices. Retail sales rose by 0.5%, aligning with market expectations, whereas producer prices experienced their most significant increase in four years. In light of consumer and producer inflation data that exceeded expectations, market participants have significantly adjusted their forecasts regarding interest rate cuts for 2026. The CME FedWatch tool now reflects an almost 30% likelihood of a rate increase occurring by December.

Heightened energy costs and ongoing inflationary dynamics maintain a framework conducive to elevated interest rates, thereby constraining potential gains in bullion valuations. The Indian government has raised gold import duties from 6% to 15% as a measure to restrict imports and bolster foreign exchange reserves. In light of diminished jewellery demand attributed to elevated prices, investment demand has exhibited remarkable resilience. The World Gold Council reports that India’s gold ETF inflows experienced a remarkable 186% increase year-on-year in the March quarter, reaching a record 20 metric tons.

Concurrently, overall investment demand rose by 52%, totaling 82 metric tons. In the first quarter of 2026, global gold demand experienced a year-on-year increase of 2%. From a technical perspective, the market is experiencing long liquidation, evidenced by a 5.29% decrease in open interest, which now stands at 7,924, alongside a price drop of Rs 208. Gold is finding support at Rs 160,985; a decline below this level could see prices approach Rs 159,990. Conversely, resistance is identified at Rs 163,015, with a breakthrough potentially leading to a test of Rs 164,050.