Gold prices in India rose on Friday. According to FXStreet, the price increased to 12,177.06 Indian Rupees (INR) per gram, up from INR 12,159.94 on Thursday. The price for a tola went up to INR 142,032.90, compared to INR 141,838.50 the day before. FXStreet calculates these prices by converting international rates using the USD/INR exchange rate and updates them daily. These rates are reference points and might vary locally. Gold has always been a reliable store of value and a means of exchange, making it a safe-haven asset during uncertain times. Central banks are the largest gold holders, buying the metal to boost trust in their economies and strengthen currencies. In 2022, central banks bought 1,136 tonnes of gold, worth about $70 billion, which was the highest amount purchased in a year. Countries like China, India, and Turkey are notably increasing their gold reserves. Gold prices are influenced by geopolitical events, concerns about recessions, and interest rates. Prices generally rise when the US Dollar weakens and interest rates drop. Gold tends to gain value when other assets decline, due to its inverse relationship with the US Dollar and riskier investments. With gold showing upward momentum, this trend reflects the economic environment of late 2025. The Federal Reserve cut interest rates to 4.25% in November 2025, putting pressure on the US Dollar and making gold more appealing. This situation often signals traders to expect further growth in gold prices. Inflation is another major factor. Recent figures show a persistent annual rate of 3.1%, well above the 2% target. In this environment, investors flock to gold as a hedge against currency devaluation. Geopolitical instability and supply chain problems further strengthen gold’s position as the ultimate safe-haven asset. A significant trend is the steady buying from central banks, which has continued since the record purchases in 2022. Central banks in emerging economies have been increasing their gold reserves throughout 2024 and 2025, establishing solid support for the market. This ongoing buying suggests a structural shift that could lead to higher prices in the long run. For derivative traders, the outlook for the coming weeks looks bullish. Buying call options on gold futures or related ETFs is a straightforward way to gain exposure to the expected price rise. Using bull call spreads can also help lower the cost of entry while still capturing potential gains, especially with markets anticipating more rate cuts in early 2026. However, gold’s inverse relationship with risk assets should be noted. If equity markets strengthen unexpectedly or rally strongly at the year’s end, it could create short-term challenges for gold as money flows into stocks. Therefore, traders should monitor major indices for any signs of a breakout that could halt the current gold rally.

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