Gold prices in India dropped on Tuesday, according to FXStreet data. The price per gram decreased from 12,568.34 INR on Monday to 12,524.32 INR. The price for a tola also fell from 146,594.70 INR to 146,079.40 INR. Keep in mind that local rates may vary slightly.

Gold Pricing Dynamics

FXStreet calculates gold prices in India by modifying international prices based on the USD/INR exchange rate. These rates are updated daily to reflect current market conditions. Central banks hold a significant amount of gold, adding 1,136 tonnes to their reserves in 2022. This strengthens economies and helps protect against currency depreciation. Gold prices usually move in the opposite direction of the US Dollar and stock markets. When the dollar weakens, gold prices often rise. Gold is considered a safe haven during times of geopolitical tension or economic downturns. Changes in interest rates can also impact gold prices; lower rates usually increase its appeal. The recent small decline in gold prices should be viewed as a minor setback within a larger upward trend. As of December 16, 2025, we anticipate major central bank actions in the year ahead. This dip provides a good entry point rather than a sign of a lasting downtrend.

Outlook and Strategy

We expect the US Federal Reserve to cut interest rates in the first half of 2026, which is a key factor in our outlook. After a period of aggressive rate hikes in 2023 and 2024, inflation has eased, and the focus is shifting to economic growth. Gold, as a non-yielding asset, becomes much more appealing when interest rates are expected to fall. It’s important to note the strong institutional demand that has supported gold prices throughout the year. Central banks purchased an impressive 1,037 tonnes of gold in 2023 and continued this trend into 2024, which has provided solid support for the market. Major players like the People’s Bank of China have kept buying through 2025, helping stabilize prices during downturns. The US Dollar Index (DXY) has weakened recently, dropping from its peaks earlier in 2025. A weaker dollar favors gold prices since gold is priced in dollars worldwide. This inverse relationship supports a positive outlook for gold as we move into the new year. For those trading derivatives, this environment suggests buying call options that expire in March or June 2026 to prepare for a rally driven by expected rate cuts. The current price drop offers a better entry point for these options, which provides leveraged exposure while limiting maximum loss to the premium paid. With uncertainty around policy timing, we can expect increased volatility in the coming weeks. Traders uncertain about market direction might consider long straddles to benefit from significant price movements, whether up or down. This could leverage the market’s response to upcoming economic data in early 2026. Create your live VT Markets account and start trading now.

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