Gold prices experienced a slight uptick of 0.28%, settling at 71843, as investors turned to safe-haven assets amid rising tensions in the Middle East and economic uncertainties in China.
The prospect of conflict between Iran and Israel, though not expected to involve the US according to a US official, drove demand for gold. Moreover, weaker than anticipated US Producer Price Index (PPI) data and disappointing export and import figures from China added to the allure of the precious metal.
Physical gold premiums rose due to strong demand aimed at stabilizing the depreciating yuan in China. Conversely, in India, dealers offered discounts for the sixth consecutive week due to record-high gold prices.
Indian discounts narrowed to $17 per ounce from the previous week’s $28, indicating sustained demand despite the premium. Similarly, premiums in China increased to $30-$50 per ounce, up from $25-$30, signaling robust demand amidst economic uncertainties.
Across Asian markets, Singapore recorded premiums of $1.20 to $2.20, Hong Kong at $1 to $2, and Japan at $0.5-$0.75. These premiums underscored continued demand across different regions, underscoring gold’s status as a preferred asset during periods of uncertainty.
The gold market witnessed short covering, with a decline in open interest by -2.44% to settle at 22743, while prices rose by 199 rupees. Support for gold is identified at 71040, with the possibility of testing levels at 70245 if this support is breached. On the upside, resistance is anticipated at 73295, with potential movement towards 74755 if prices surpass this level.
Despite short-term fluctuations, gold remains poised to maintain its appeal as geopolitical tensions persist and economic challenges endure, highlighting its enduring status as a haven asset in uncertain times.
