CHENNAI: Gold prices eased slightly on Friday (January 9), but remained firmly elevated, reflecting a market caught between strong safe-haven demand and short-term selling pressures. In international markets, spot gold was marginally lower during Asian trading hours as a firmer US dollar and some technical selling weighed on prices. Even so, the metal was still set for a solid weekly gain, underlining the strength of the broader upward trend that has dominated early 2025.
The mild dip in prices did not signal any fundamental weakening in gold’s outlook. Instead, it was largely driven by short-term factors, including portfolio adjustments by large funds and profit-taking after the sharp rise seen over recent weeks. Commodity index rebalancing also played a role, prompting some institutional investors to trim their exposure to precious metals, which added to the pressure on prices during the session. At the same time, the US dollar found some support ahead of key economic data, making gold slightly more expensive for overseas buyers and encouraging a pause in the rally.
Despite these headwinds, gold continued to draw strong support from its role as a safe-haven asset. Persistent geopolitical tensions, uncertainty over global economic growth and concerns about financial market stability kept investor interest in bullion intact. Many investors continue to view gold as a reliable store of value at a time when equity markets remain volatile and the outlook for major economies is still clouded by uneven growth and policy risks.
According to analysts reports, expectations around interest rates have also remained favourable for gold. While inflation has cooled from previous peaks, it is still high enough in many regions to erode the real returns on cash and fixed-income investments. At the same time, markets increasingly believe that major central banks are closer to the end of their rate-hiking cycles, and possibly moving toward cuts later in the year. Lower or stable interest rates reduce the opportunity cost of holding gold, which does not generate interest but benefits when real yields fall.
COMEX Gold is consolidating near $4,470 following a healthy pullback, while continuing to trade well above its rising trendline and the 20-day EMA near $4,400. The earlier resistance band of $4,400–$4,420 has now turned into a strong support base, reinforcing the strength of the prevailing uptrend.
"The recent consolidation appears to reflect disciplined profit-taking rather than trend exhaustion, thereby offering structured entry opportunities. Continued safe-haven demand, sustained central bank buying, and expectations of a more accommodative global monetary policy environment remain key bullish drivers. A sustained breakout above $4,500 could quickly extend gains toward $4,550–$4,600. The $4,400–$4,420 zone remains an attractive accumulation area, with higher time frame charts showing no signs of trend reversal," said R Ponmudi, CEO at brokerage and wealth management firm Enrich Money.
Another powerful driver behind gold’s strength has been sustained buying by central banks. Many countries, particularly in Asia and emerging markets, have continued to increase their gold reserves as a way to diversify away from the US dollar and reduce exposure to geopolitical and financial risks. This steady institutional demand has created a strong floor under prices and helped gold hold on to its gains even when speculative or retail demand softens, says market watchers.
Physical demand showed a mixed picture on Friday. In India, high prices have started to curb jewellery buying, with consumers becoming more cautious as gold trades near record levels in rupee terms. Dealers have been forced to adjust premiums as shoppers delay purchases in the hope of better prices. In contrast, demand in China has remained relatively stronger, with buyers willing to pay higher premiums to secure physical gold, reflecting both investment interest and lingering concerns about domestic economic conditions.
Looking ahead, according to commodity experts, gold is likely to remain volatile in the near term as markets react to economic data, currency movements and changes in risk appetite. However, the underlying trend remains supportive. As long as geopolitical risks persist, central banks continue to buy and real interest rates stay under pressure, gold is expected to retain its appeal as a defensive and diversification asset. Friday’s modest pullback, therefore, appeared more like a pause in a strong rally than the beginning of any meaningful reversal.