Gold prices in India increased on Monday, rising to 12,810.76 Indian Rupees per gram from 12,596.41 INR on Friday. The price per tola also went up, changing to 149,422.20 INR from 146,922.00 INR, according to FXStreet. FXStreet adjusts international prices to reflect local currency and units. Gold prices are updated daily based on current market rates at the time of publication. These are reference rates; local prices may differ.

Gold As A Safe Haven

Gold is a valuable asset known for its stability and ability to act as a medium of exchange. It’s seen as a safe investment and a shield against inflation, especially during tough economic times. Central banks are major gold buyers, adding to their reserves to help support economies. In 2022, they added 1,136 tonnes of gold—worth about $70 billion—making it the highest annual purchase on record. Gold prices often rise when the US Dollar and Treasuries drop. They also fluctuate with global tensions, economic conditions, and interest rates, largely influenced by the strength of the USD. With gold prices gaining today, this could signal a continuing trend. The recent increase indicates more interest in safe-haven assets amidst economic uncertainty. Market data shows the US Dollar Index fell nearly 2% in the last quarter of 2025, usually boosting gold prices.

Central Banks Support

Central bank actions play a vital role in supporting gold prices, creating a strong foundation. In 2025, global central banks added over 950 tonnes to their reserves, following a pattern of aggressive buying established in previous years. This consistent demand, especially from emerging markets, means that significant price drops are likely to be quickly bought up. Expectations of lower interest rates from the US Federal Reserve later this year also shape this environment. As gold does not yield interest, it becomes more appealing when bond yields drop. Traders are already factoring this into the futures market, anticipating at least two rate cuts before the end of 2026. Given the inverse relationship with riskier assets, it’s worth noting that the S&P 500 has been sluggish, rising less than 1% since the beginning of the year. This poor performance in stocks is leading investors to seek alternatives such as precious metals, which is a typical sign of late-cycle economic behavior. In the upcoming weeks, consider strategies that could benefit from rising prices and possible volatility. This includes exploring call options to take advantage of potential gains or using futures contracts to establish long positions. The focus should be on positioning for a market that increasingly favors tangible, safe-haven assets over financial ones. Create your live VT Markets account and start trading now.

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