Gold prices in India have decreased. The cost per gram is now 11,295.04 INR, down from 11,351.78 INR yesterday. The price per tola also dropped from 132,404.90 INR to 131,743.10 INR. The U.S. Dollar has reached heights not seen since August, affecting gold prices. A ceasefire between Israel and Hamas contributed to the decrease in gold prices. Although Federal Reserve Chair Jerome Powell did not introduce new policies and inflation remains a concern, traders still anticipate that the U.S. central bank will reduce borrowing costs twice by the end of the year.

US Government Shutdown Continues

The U.S. government shutdown is still ongoing, causing delays in funding bills. In global news, Ukraine is facing a large-scale attack, which adds to geopolitical risks even after the Israel-Hamas agreement brought some relief. Gold prices often move in the opposite direction of the U.S. Dollar and high-risk assets. They also react to geopolitical and economic uncertainties. Central banks frequently buy gold to diversify their reserves; in fact, they added 1,136 tonnes in 2022, the highest annual purchase ever. Gold prices in India are tracked by FXStreet using global rates, which are converted into local currency and updated daily. Recently, gold prices have dipped a bit after a strong rally. This comes as the U.S. Dollar Index hit a peak of 107.50, its highest since August. This Dollar strength has led to some profit-taking, a typical market response after a significant rise. It’s important to view this as a temporary pause rather than a major trend change, as there is still strong support in the market. Despite cautious remarks from the Federal Reserve in their September meeting, the derivatives market has a different outlook. The CME FedWatch Tool indicates more than a 70% chance of at least one rate cut by year-end, with a second cut still possible. This expectation for lower borrowing costs favors non-yielding assets like gold.

Impact of the Government Shutdown

The ongoing U.S. government shutdown, now in its second week, is creating domestic uncertainty, which supports safe-haven assets. Although the ceasefire between Israel and Hamas provided some calm, the situation in Ukraine keeps geopolitical risks high. Credit rating agencies like Moody’s are warning about the long-term economic effects of the shutdown, which could increase demand for gold. Historically, central bank buying has reached record levels, especially in 2022. New data from the World Gold Council for the third quarter of 2025 shows that emerging market central banks have added another 250 tonnes to their reserves. This ongoing institutional demand helps stabilize the market, making significant price drops less likely. For derivative traders, this current dip offers a chance to prepare for the next upward movement. The combination of anticipated rate cuts and ongoing risk factors suggests that buying call options or setting up bull call spreads could be a smart move. Given the mixed signals for the short term, it’s likely that volatility will remain high, making options an effective way to manage risk while keeping open to potential gains. Create your live VT Markets account and start trading now.

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