Gold prices in India dropped on Friday, according to FXStreet. The price fell to INR 12,951.37 per gram, down from INR 12,987.43 on Thursday. The price per tola also decreased to INR 151,062.20 from INR 151,482.90 the day before. In India, gold prices are influenced by international market prices adjusted to local currency.

Gold as a Safe Investment

Gold is often used as a safe investment and protection against inflation. Central banks are the biggest holders of gold, purchasing 1,136 tonnes in 2022. Gold prices usually move opposite to the US Dollar and riskier assets. It is considered a safe choice during times of political or economic uncertainty. Interest rates and the strength of the US Dollar affect gold prices. When the Dollar weakens, gold prices generally rise. FXStreet provides daily updates while acknowledging local price changes. Gold remains an important asset for diversification and economic security.

Market Outlook and Strategies

The recent drop in gold prices may be a temporary pause before a significant market movement. In the coming days, attention will turn to the US Nonfarm Payrolls (NFP) report, expected to show ongoing weakness in the labor market. This week, the US Dollar Index (DXY) held above 105.50, suggesting that traders are anticipating strength ahead of this key data. Many expect a weak jobs report, which would indicate a slowing US economy and put pressure on the Federal Reserve to adopt a more relaxed monetary policy. If the NFP figure comes in weaker than expected, the US Dollar could drop, creating a favorable environment for gold. A similar situation occurred when Q4 2025 inflation data was weaker than anticipated, causing gold prices to jump nearly 4% in one week. For traders expecting a weak NFP number, buying call options on gold futures is a smart strategy. This lets them take advantage of a potential price increase while limiting risk to the premium paid for the options. Focus on near-term contracts like February or March 2026 to benefit from the volatility after the report. Conversely, if the jobs report is unexpectedly strong, the US Dollar could strengthen, leading to lower gold prices. To safeguard against this, buying put options can serve as a protective measure or a speculative option for a price decline. We know from the aggressive rate hikes in 2024 and early 2025 that unexpected positive economic data can pressure non-yielding assets like gold. Despite short-term ups and downs, strong and consistent demand from central banks provides a fundamental support level for gold. The latest World Gold Council report for Q4 2025 showed that central banks added another 250 tonnes to their reserves, continuing a long-term accumulation trend. This steady buying helps cushion price dips and offers a positive long-term outlook for gold. Create your live VT Markets account and start trading now.

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