Gold prices in India fell on Thursday. The cost per gram dropped to 11,541.37 Indian Rupees (INR), down from 11,580.38 INR the day before. The price per tola also declined, going from INR 135,066.80 to INR 134,673.20. In response to China’s limits on rare earth exports, the US government is considering a plan to restrict software-powered exports to China. This news comes during a US government shutdown that has now lasted four weeks, with the Senate set to vote on a funding bill that is expected to fail.

Gold’s Performance in 2025

Gold has risen more than 50% in 2025. This increase surpasses gains made during the 2008 financial crisis and the Covid-19 pandemic. Although there has been some profit-taking recently, gold is still up about 55% this year. The Fed funds futures show a 97% chance of a 25 basis point rate cut. FXStreet updates Indian gold prices by converting international USD rates to the local currency, which may differ slightly from market rates. Gold is often seen as a safe-haven asset and a hedge against inflation. Central banks around the world, especially in emerging economies, are buying significant amounts of gold to strengthen their economies. The recent slight decline in gold prices should not be viewed as weakness; it’s more likely due to profit-taking. The metal is still enjoying a remarkable 55% rise in 2025, which could indicate a consolidation phase. The long-term upward trend appears solid for now. The ongoing U.S. government shutdown, which is now in its fourth week, contributes to instability, making gold more appealing. As it nears the record 35-day shutdown from 2018-2019, political uncertainty is pushing investors toward safe-haven assets. This domestic uncertainty in the world’s largest economy lends support to gold.

Federal Reserve and Geopolitical Influence

There is almost certainty about interest rate cuts from the Federal Reserve, with markets predicting a 97% chance of this happening. Recent economic data, including a report showing U.S. job growth slowed to just 95,000 in September, backs this expectation. Lower rates increase the allure of non-yielding gold, making it a more attractive investment. Geopolitical tensions between the U.S. and China also bolster gold prices, despite a possible upcoming meeting. The consideration of new U.S. export restrictions as a reaction to China’s rare earth limits creates uncertainty that benefits gold. This ongoing conflict is likely to keep a baseline level of risk embedded in the market. Institutional demand for gold is still very strong. After record purchases in prior years, recent data from the World Gold Council shows that central banks added another 250 tonnes to their reserves in Q3 2025. This ongoing buying from major financial institutions provides robust support for gold prices. As a result, derivative traders might see this current dip in price as a buying opportunity. We suggest considering options strategies like buying call options or establishing bull call spreads. These methods can help you participate in potential gains while managing risk in today’s volatile market. Create your live VT Markets account and start trading now.

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