Gold Prices and Influencing Factors

Gold prices in India increased on Monday, according to FXStreet. The price per gram is now INR 12,204.32, up from INR 12,141.17 on Friday. The price for gold per tola has risen to INR 142,347.20 from INR 141,610.80 last Friday. A Troy ounce of gold is valued at INR 379,590.30. FXStreet figures these prices by converting international gold prices into Indian Rupees using the USD/INR exchange rate and adapting local measurement units. Gold has been a store of value and a medium of exchange for centuries. Today, it is seen as a safe-haven asset. Central banks, particularly in emerging markets like China, India, and Turkey, are growing their gold reserves, purchasing 1,136 tonnes in 2022. Several factors affect gold prices, including geopolitical tensions, interest rates, and the value of the US Dollar. Gold typically rises when the Dollar weakens, and falls when the Dollar is strong. Lower interest rates also boost gold prices.

The Federal Reserve’s Role and Economic Indicators

Today’s slight increase in gold prices shows a broader trend of market uncertainty. Traders should pay attention to this, especially as discussions about a potential global economic slowdown in 2026 gain momentum. This reinforces gold’s position as a safe-haven asset. Looking ahead, many anticipate that the US Federal Reserve may hint at a pause or even consider rate cuts in early 2026. The US Dollar Index has recently dropped to around 102.5, down from earlier highs this year. This creates a more positive environment for gold, decreasing the opportunity cost of holding it, as it does not yield interest. Recent economic data supports this cautious view. US jobless claims have hit an 18-month high of 250,000, suggesting a softening labor market. Combined with slowing manufacturing output, this makes a case for more accommodating monetary policy. Consequently, more investors are turning to gold as a safeguard against potential downturns. Additionally, ongoing purchases from central banks are providing strong support for gold prices. The World Gold Council’s recent report for the third quarter of 2025 revealed that central banks added another 280 tonnes to their reserves. This consistent demand reflects that institutional investors continue to buy gold. This situation is similar to late 2018, when the Federal Reserve paused rate hikes, leading to a substantial rally in gold prices through 2019. Current economic signals suggest we might see a comparable trend as we move into the new year. Traders may find short-term price dips to be good buying opportunities. For those trading derivatives, adopting a bullish position on gold could be beneficial in the upcoming weeks. Taking long positions in gold futures or buying call options could allow traders to profit from anticipated price increases driven by changes in monetary policy. These strategies can help to maximize earnings while managing risks. Create your live VT Markets account and start trading now.

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