Gold prices in India rose on Wednesday. A gram of gold now costs 11,880.98 Indian Rupees (INR), up from 11,759.03 INR the day before. The price for a tola increased from 137,155.00 INR to 138,577.50 INR. Fed Chairman Powell’s recent comments have bolstered gold prices. He stated that there have been no major changes in the outlook for jobs and inflation since the last meeting, while also acknowledging increasing risks in the labor market and inflationary pressures.

Upcoming Consumer Price Inflation Update

On October 24, a release of the latest Consumer Price Index report by the Bureau of Labor Statistics will provide an update on consumer price inflation. Last month, the NFIB Business Optimism Index decreased by 2 points to 98.8, reflecting ongoing economic uncertainty. Gold prices tend to rise when the US dollar weakens. The US Dollar Index (DXY) fell by 0.25% to 99.00, and the US 10-year Treasury yield dropped by three basis points to 4.029%. Real yields in the US also declined. Gold is viewed as a safe-haven asset, and its price often increases during geopolitical instability or fears of a recession. In 2022, central banks added 1,136 tonnes of gold, valued at about $70 billion, to their reserves. Gold prices are influenced by their inverse relationship with the US dollar and US Treasuries, as well as economic conditions and central bank policies. Recently, we interpret the Fed’s dovish remarks as an indication that interest rate hikes might pause. The market is pricing in a higher likelihood that rates will stay steady at the next meeting, which is putting upward pressure on gold. This trend parallels what we saw in late 2023 when a similar pivot from the Fed led to a significant rally in gold. The drop in the US Dollar Index to 99.00 and the 10-year Treasury yield to 4.029% creates favorable conditions for gold. A weaker dollar makes gold cheaper for international buyers, and lower yields reduce the opportunity cost of holding gold. Both factors historically signal a rise in gold prices.

Key Event for Gold Prices

We are closely monitoring the Consumer Price Index (CPI) report on October 24. A higher-than-expected inflation reading could disrupt the current dovish mood and cause gold prices to drop sharply. Thus, any bullish investments should be protected against this significant risk. For traders wanting to leverage the current trend, buying call options on major gold ETFs with November expiration dates may be a wise choice. This approach allows for potential gains while managing the volatility expected from the upcoming CPI report. The high implied volatility also makes selling out-of-the-money puts an appealing strategy for those who foresee stable or rising prices. In addition to the Fed’s actions, we should note the strong support from central bank purchases, which have continued from record buys in 2022 into 2025. Reports from the World Gold Council for Q3 2025 are anticipated to confirm that global central banks remained net buyers, adding hundreds of tonnes to their reserves. This steady demand, coupled with ongoing geopolitical uncertainty, provides a strong foundation for gold prices. Create your live VT Markets account and start trading now.

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