Gold prices in India increased on Monday, according to FXStreet data. The price per gram rose to 12,602.59 INR from Friday’s 12,527.28 INR. Similarly, a tola climbed to 146,994.10 INR from 146,115.80 INR. Gold prices in India reflect global prices adjusted for the USD/INR exchange rate. These prices are daily estimates and can vary by location. Currently, gold is priced at 391,984.50 INR per troy ounce.

The Importance of Gold

Gold has always been valued as a way to store wealth and as a method of exchange. People often see it as a stable investment, especially in uncertain times. It also serves as a hedge against inflation and is not tied to any specific government. Central banks are significant buyers of gold, using it to back their national currencies. In 2022, these banks added 1,136 tonnes of gold, worth about $70 billion, which set a new record for annual purchases. The price of gold typically moves in the opposite direction of the US Dollar and US Treasuries; it goes up when the Dollar goes down. Geopolitical issues can also push gold prices higher due to its reputation as a safe haven. Lower interest rates tend to support gold prices, while higher rates may lower them. Recent trends show gold prices rising, with the latest jump over 12,600 INR per gram indicating a shift in market sentiment. This rise suggests that traders should keep an eye on the factors affecting precious metals, as opportunities could arise in the coming weeks. The recent increase in gold appears tied to a weaker U.S. Dollar, which has been declining against other currencies. Following a series of aggressive interest rate hikes by the U.S. Federal Reserve in 2023, the market now expects a more neutral or even dovish approach as we head into 2026. This shift usually puts pressure on the dollar, thereby increasing gold prices.

The Role of Central Banks in Gold Prices

We should also highlight the ongoing purchases by central banks, which have provided strong support for gold prices. This trend follows 2022’s record addition of 1,136 tonnes to global reserves. Reports from the World Gold Council for 2024 and 2025 confirm that emerging markets are leading these purchases, absorbing supply from the market. Moreover, global inflation remains a major concern, as many economies struggle to reach the 2% target. This persistent inflation increases gold’s appeal as a reliable asset. Ongoing geopolitical tensions in key regions also drive investment toward safe-haven assets like gold. For those involved in trading derivatives, this environment suggests considering bullish strategies. Taking long positions in gold futures or buying call options can allow for exposure to a potential continued rise in prices. These strategies would benefit if the upward momentum lasts through the end of the year. However, with growing market uncertainty, implied volatility is rising, which can make buying options costlier. Therefore, traders might opt for strategies like bull call spreads. This approach helps manage initial costs while still allowing for profit from a moderate increase in gold prices. Create your live VT Markets account and start trading now.

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