Gold prices in India dropped on Monday, according to FXStreet data. The price reached 13,053.88 Indian Rupees (INR) per gram, down from INR 13,098.08 on Friday. The price for gold per tola also fell to INR 152,261.80, down from INR 152,773.40 on Friday. FXStreet calculates gold prices in India by adjusting international rates (USD/INR) and updates them daily. These prices are for reference only, so local rates may vary. The price of gold is influenced by various factors, including geopolitical tensions and interest rates, because it is considered a safe-haven asset.

Gold As A Safe Investment

Gold has always been viewed as a reliable store of value and medium of exchange. It is a safe investment during uncertain times and protects against inflation and falling currencies. Central banks, the biggest gold holders, diversify their reserves by buying gold, adding 1,136 tonnes worth about $70 billion in 2022. Gold prices often move opposite to the US Dollar and US Treasuries. When the Dollar weakens, gold prices usually rise. Events like geopolitical tensions or fears of recession can drive up gold prices due to its reputation for safety. We noticed a slight dip in gold prices, with the per-gram rate in India now at 13,053.88 INR. This minor decline shouldn’t signal a major trend change. Instead, it provides an opportunity to reflect on the larger market forces as we approach the new year.

Impact Of US Dollar And Interest Rates

Gold prices are closely linked to the US Dollar and expectations about interest rates. The US Dollar Index (DXY) has been stable around 104 for the past month, as markets consider the Federal Reserve’s statements on possible rate changes in 2026. This stability creates uncertainty, which heavily influences derivative pricing. Historically, gold tends to do well when interest rates are forecasted to drop, a trend seen in late 2023 before the expected rate cuts in 2024. With current US inflation around 2.5%, traders are anticipating a dovish shift from the Fed within the next two quarters. This outlook suggests that gold prices could rise in the long term. Strong central bank demand also supports gold prices. After record purchases of 1,136 tonnes in 2022, the World Gold Council reported that banks worldwide added another 290 tonnes in the third quarter of 2025. This ongoing buying from official institutions reflects a long-term confidence in gold as a reserve asset. For derivative traders, this situation signals rising implied volatility. Strategies like selling cash-secured puts on gold ETFs can help collect premiums while setting a lower entry price for a long position. Current market uncertainty means that volatility itself is becoming a tradable asset. Given the strong support for gold prices and potential future rate cuts, using this minor dip to acquire long-dated call options could be a smart strategy. It allows you to benefit from a possible rally through mid-2026 while clearly defining your risk. This positions your portfolio to take advantage of the expected easing of monetary policy. Create your live VT Markets account and start trading now.

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