Gold prices in India stayed stable on Tuesday, according to FXStreet data. The price per gram was INR 13,367.03, slightly up from INR 13,354.78 on Monday. The price for gold per tola reached INR 155,910.10, a modest change from INR 155,767.50 the day before. These prices are based on international rates adjusted to local currency and units.

Gold As A Safe Haven

Gold has historically served as a reliable store of value and a medium of exchange. It is seen as a safe-haven asset and helps protect against inflation and currency decline because it is not linked to any government. Central banks, looking to strengthen their economies, are the biggest holders of gold. In 2022, they bought 1,136 tonnes valued at about $70 billion, marking the highest annual purchases on record. Gold prices move in the opposite direction of the US Dollar and US Treasuries. A rising stock market may lower gold prices, whereas market declines often increase them. Several factors affect gold prices, including geopolitical instability and interest rates. Generally, when the US Dollar weakens, gold prices go up, and when the Dollar is strong, gold prices tend to fall. Gold prices are currently stable, but we see this as a period waiting for the next big move. A major factor to follow is the U.S. Federal Reserve’s decision to cut interest rates by 25 basis points in December 2025—the first reduction in over two years. This change suggests a new environment for non-yielding assets like gold.

Market Positioning And Strategy

Since that decision, the US Dollar Index has weakened, falling from around 105 in late 2025 to about 101.80 this month. Recent U.S. inflation data showed a drop to 2.9%, but it had remained above 3.5% for most of last year, supporting gold as a protective asset. Derivative traders should prepare for continued dollar weakness, expecting at least two more rate cuts by July. Strong demand from central banks supports gold prices, as purchases remained high throughout 2025. Following a trend of adding over 1,000 tonnes to reserves in both 2023 and 2024, last year saw aggressive buying from emerging economies. This steady demand helps maintain price stability even during significant dips. In this context, implied volatility in the options market is relatively low, indicating some market complacency. This presents an opportunity to buy medium-term call options expiring in April or May 2026 to potentially benefit from upward movements. This approach allows traders to prepare for a price rally with limited risk. Additionally, we cannot overlook the ongoing geopolitical risks that have persisted into late 2025, particularly involving key shipping routes. Any resurgence of global tensions could lead to a rush for safety, significantly benefiting gold. This risk factor adds another potential catalyst that isn’t fully factored into the current stable prices. Create your live VT Markets account and start trading now.

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