Gold prices in India rose on Wednesday, according to FXStreet. The price per gram increased to 12,235.06 Indian Rupees, up from 12,197.75 INR the day before. The price per tola also went up, reaching INR 142,707.40, from 142,272.10 INR. FXStreet’s calculations reflect international prices in USD converted to INR.

Historical Value of Gold

Historically, gold has been a valuable asset, independent of any specific issuer or government. It serves as a safe haven during economic troubles and protects against inflation and currency devaluation. Central banks hold the most gold reserves to strengthen their economies and currencies. In 2022, they increased their gold reserves by 1,136 tonnes, worth about $70 billion. Gold usually moves in the opposite direction of the US Dollar and Treasuries, rising as the Dollar falls. It also tends to increase when risk assets decline; sell-offs in the stock market often boost gold. Fluctuations in gold prices can arise from geopolitical tensions or fears of recession. Its prices are also affected by the strength of the Dollar since gold is priced in dollars. Typically, lower interest rates can lead to higher gold prices, while higher rates may push them down.

Factors Influencing Gold Prices

Today, gold prices are slightly up, reflecting uncertainty in the global economy. This rise occurs as market participants consider the possibility of a US economic slowdown by 2026. This situation has put the Federal Reserve in a tough spot after maintaining stable rates throughout much of 2024 and 2025 to combat inflation. Strong central bank demand continues to support gold prices, preventing large sell-offs. In 2022, central banks added a record 1,136 tonnes to their reserves, and this trend is continuing. According to the World Gold Council, they have already added over 800 tonnes in the first three quarters of 2025. This consistent buying indicates a strategic move away from reliance on the US Dollar. Gold’s inverse relationship with the Dollar is crucial now, as the US Dollar Index (DXY) has dropped from its 2024 highs to around 102. With US inflation still high at 3.1%, gold’s role as a hedge is becoming increasingly appealing. In this situation, holding assets that perform well during currency depreciation seems wise. Given the potential weakening of the Dollar and ongoing geopolitical tensions, we should explore strategies that would benefit from rising gold prices. Purchasing call options that expire in January and February 2026 could effectively capture potential gains. This approach lets us take part in a rally while keeping risk limited to the premium paid for the options. Create your live VT Markets account and start trading now.

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