Liquidity – Gold remains in a consolidation phase, largely due to thin liquidity conditions during the Lunar New Year holiday week. With major Asian markets — including mainland China, Hong Kong, Singapore, Taiwan, and South Korea — closed, trading volumes are subdued. The muted price action appears technical in nature rather than driven by any fundamental shift.

Economic Data – On the macro-economic front, minutes from the Federal Reserve’s January meeting indicated a divided policy stance. Some officials supported pausing further rate cuts until inflation shows clearer improvement, while others discussed the possibility of rate hikes, advocating a balanced outlook. Following this, traders reduced expectations for multiple rate cuts this year. Markets now await key GDP and PCE inflation data, which could shape future rate expectations.

Geopolitical Tensions – Geopolitical tensions involving Iran have resurfaced. Reports suggest that any potential U.S. military action, if talks fail, could evolve into a prolonged campaign. This development may provide underlying support to gold if risks escalate further.

Technical Triggers

As indicated in the previous report, gold has rebounded from its key support level near $4,850 (~ Rs.1,50,000) and is now gradually advancing toward the resistance zone around $5,100 (~ Rs.1,60,000). One may consider a buy-on-dips strategy near support levels and book profits on rallies closer to resistance, until a decisive breakout occurs.

Silver has bounced from its support zone of $70–$90 (~ Rs.2,25,000). Prices are now heading toward the resistance levels of $85 (~ Rs.2,68,000) and $90 (~ Rs.2,85,000). Given the high volatility in silver, a buy-on-dips and sell-on-rallies approach remains appropriate within the current trading range.

Support and Resistance