Gold prices in India stayed mostly stable on Wednesday, according to FXStreet. The price was 12,553.34 Indian Rupees per gram, up from 12,541.37 on Tuesday. For tola, the price reached 146,425.10 INR, a slight rise from 146,280.10 INR the day before. FXStreet figures the gold prices by converting global rates (USD/INR) to local currency and standard units.

Gold Buyers and Trends

Central banks are the biggest buyers of gold. In 2022, they added 1,136 tonnes worth about $70 billion to their reserves, the highest annual purchase ever. Many emerging economies, like China, India, and Turkey, have increased their gold holdings. Gold prices often move opposite to the US Dollar and US Treasuries. When the Dollar weakens or interest rates drop, gold usually rises. It’s viewed as a safe asset during tough economic times. Market fears from geopolitical issues and potential economic downturns also drive demand for gold, as it’s seen as a buffer against inflation. As the year ends, gold prices are stabilizing around 12,553 INR per gram after a significant 65% increase throughout 2025, one of the strongest rises since the late 1970s. For traders, this might be a good time to evaluate if the market is preparing for its next move. The main reason for this rally is the expectation of US interest rate cuts in 2026. This belief was strengthened by the US Core PCE inflation data for November 2025, which came in at 2.8%, slightly lower than expected. This may push the Federal Reserve to ease policies. Lower interest rates make it cheaper to hold gold, which doesn’t yield returns.

Market Dynamics and Strategy

Strong demand from institutional buyers is providing a solid price foundation. The World Gold Council’s recent Q3 2025 report showed that central banks added 250 tonnes to their reserves, continuing the buying trend from 2022. This steady demand from official sources indicates a long-term commitment to gold. However, it’s essential to recognize that speculative trading has become crowded. Last week’s CFTC report revealed that net long positions by non-commercial traders on the COMEX are at their highest since 2020. This suggests that much of the good news is already priced in, leaving the market open to a short-term decline. In this context, it’s wise to structure trades for early 2026 using options. Buying call spreads can help traders take advantage of potential price increases driven by rate cuts while also managing risk and minimizing costs compared to outright calls. This strategy is effective if we see a gradual rise instead of a sudden surge. The continuing inverse relationship with the US dollar supports gold prices. The US Dollar Index (DXY) has been declining, recently dropping below 98.00 for the first time in over a year. A weaker dollar makes gold cheaper for those using other currencies, generally increasing demand. This situation brings to mind the 2009-2011 period when gold soared due to low interest rates and quantitative easing following the financial crisis. History indicates that as monetary policy stays accommodating, gold’s path is likely to trend upward. Create your live VT Markets account and start trading now.

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