Gold prices experienced a notable decline of 2.12%, closing at Rs 158547, as increasing U.S. Treasury yields and a strengthening dollar diminished the allure of bullion as a safe-haven investment. Ongoing tensions in the Middle East, coupled with rising crude oil prices, have intensified inflation worries, prompting markets to significantly discount the possibility of Federal Reserve rate cuts in the current year. In April, U.S. industrial production experienced an increase of 0.7%, marking the most significant rise in 14 months.
Concurrently, manufacturing output advanced by 0.6%, indicative of robust economic momentum and bolstering anticipations of a sustained period of elevated interest rates. India’s decision to increase gold import tariffs to 15% from 6% has had a notable effect on domestic demand sentiment. In India, dealers reported unprecedented discounts reaching as high as $207 per ounce relative to official domestic prices, a development attributed to a significant decline in jewellery demand coupled with a rise in scrap supply. In spite of diminished physical purchasing, the demand for investment persisted strongly.
The World Gold Council reports that India experienced a remarkable 186% year-on-year increase in gold ETF inflows during the March quarter, reaching a historic high of 20 metric tons. Investment demand in India increased by 52% to reach 82 metric tons, exceeding jewellery demand for the first time in recorded history. In the first quarter of 2026, global gold demand experienced a year-on-year increase of 2%, reaching 1,230.9 metric tons, bolstered by robust purchases of bars, coins, and by central banks.
From a technical perspective, the market is experiencing long liquidation, evidenced by a decline in open interest of 8.8% to 7227, alongside a price drop of Rs 3431. Gold is encountering immediate support at Rs 157470, with additional downside potential toward Rs 156390. On the upside, resistance is observed at Rs 160310, and a breakout above this level could propel prices toward Rs 162070.