Gold Price Outlook: Resistance at Rs 1,63,275 Amid Geopolitical Tensions
Gold prices opened higher at the start of the week, a widely anticipated move as investors sought safe-haven assets following continued US and Israeli attacks on Iran. The geopolitical escalation has fueled demand for precious metals, with gold holding broadly positive above $5,000 per ounce during the week.
Geopolitical Drivers and Safe-Haven Demand
The ongoing conflict between the US, Israel, and Iran has created a risk-off environment, prompting a flight to safety. Gold recorded its seventh consecutive monthly gain in February, marking the longest streak since 1973. This rally is primarily driven by heightened geopolitical tensions and the reshaping of international relations under US President Donald Trump.
However, sustained strength in safe-haven currencies like the US dollar has triggered some profit-booking in gold. Despite this, the metal has maintained its upward trajectory, supported by central bank purchases and a broader investor shift away from sovereign bonds and currencies.
Central Bank Purchases Bolster Demand
Central banks have continued their gold-buying spree from the previous year, adding a solid foundation to demand. Bank Negara Malaysia made its first net purchase of gold since 2018, while the Bank of Korea is poised to resume gold investments for the first time since 2013.
Other emerging markets are also contributing to this trend. The Central Bank of Uzbekistan purchased 9 tonnes in the current month, continuing its buying streak since October. Geopolitical uncertainty remains a persistent backdrop, with the broadening of the demand base emerging as a key theme this year.
Weekly Price Forecast and Technical Levels
According to Maneesh Sharma, AVP - Commodities & Currencies at Anand Rathi Shares and Stock Brokers, the bias for gold is expected to remain positive this week amid expectations of a prolonged US-Iran conflict.
Spot Gold (Current Market Price: $5,165/oz): Positive bias with support at $5,070–$5,050 per ounce levels. Upside resistance persists around $5,360–$5,370/oz on a weekly closing basis. A sustainable close above this zone could open targets towards $5,500–$5,600 levels.
Spot Silver (CMP: $84.50/oz): Volatile to positive bias with a higher-side target at $92–$93/oz. Being a less liquid market compared to gold, silver could remain volatile within a broad trading range of $76–$89 this week.
MCX April Futures Contract (CMP: Rs 1,63,275/10 gm): Immediate resistance is seen around Rs 1,65,000–1,65,700 per 10 gm. A decisive weekly close above this zone could open targets towards Rs 1,72,000 and beyond in the upcoming week.
Market Implications and Risk Assessment
The trajectory of bullion prices will largely depend on the duration and intensity of the conflict, as global investors reassess their risk exposure. Safe-haven currencies such as the US Dollar, Japanese Yen, and Swiss Franc are expected to be in high demand, while global equity markets could face selling pressure if the conflict prolongs.
Diplomatic developments over Iran will be closely scrutinized during the week. Any indications of de-escalation could lead to profit-booking moves later in the week. Meanwhile, oil prices are also anticipated to surge, adding to the overall market volatility.
Disclaimer: Recommendations and views on the stock market, other asset classes, or personal finance management tips given by experts are their own. These opinions do not represent the views of Bharat Horizon.
