Gold prices in India dropped on Thursday, according to FXStreet data. The price per gram fell to 12,183.27 Indian Rupees from 12,207.64 INR the day before. The price per tola also decreased, reaching 142,103.20 INR, down from 142,387.50 INR on Wednesday. FXStreet calculates these prices by converting international rates (USD/INR) to the local currency.

Gold as a Safe Haven

Gold has always been valued as a way to preserve wealth and as a method of trade. It is seen as a safe-haven asset, especially during turbulent times, and it helps protect against inflation and currency loss. Central banks are the largest buyers of gold to enhance their perceived economic strength. In 2022, they bought 1,136 tonnes, worth around $70 billion, marking the highest annual purchase ever recorded. Gold prices move in the opposite direction to the US Dollar and US Treasuries. A weaker dollar usually boosts gold prices, while a stronger dollar tends to keep them lower. Various factors, such as geopolitical tensions and interest rates, affect gold prices. Since gold does not yield any return, its price tends to rise when interest rates are low, while higher rates can suppress it. Today’s small dip in gold prices appears connected to a pause in the recent trend of selling the US Dollar. This little price change, along with a more optimistic sentiment in equity markets, suggests a temporary shift away from safe-haven assets. Traders should see this as a brief market adjustment rather than a significant trend change. A key event to watch for in the coming days is the release of US employment data, which will heavily influence the Federal Reserve’s next steps. A strong jobs report, like the unexpected gain of 210,000 jobs in October 2025, could strengthen the dollar and put further pressure on gold. On the other hand, a weak report might boost gold’s value, making the days leading up to the announcement ideal for strategic positioning. Given the uncertainty, traders using derivatives should expect increased volatility. Options strategies that profit from price movements, like long straddles or strangles on gold futures, may be effective for taking advantage of the expected price swings following the data release. This approach allows traders to benefit from significant movements in either direction without needing to predict the outcome exactly.

Central Bank Buying and Market Support

Looking at the bigger picture, it’s important to remember the substantial central bank purchases that supported gold prices in 2022 and 2023. According to the World Gold Council’s Q3 2025 report, net purchases by central banks have slowed to 185 tonnes. However, this consistent demand still provides a solid foundation for the market. This structural support suggests that any sharp, data-driven declines could be viewed as buying opportunities by larger institutions. In India, the rising USD/INR pair, driven by ongoing foreign fund outflows, presents a specific challenge for local gold prices. Recent government data confirmed a net Foreign Institutional Investor (FII) outflow of $2.1 billion in November 2025, continuing a trend for three months. This currency dynamic could reduce INR-denominated gold returns even if international dollar prices stay stable. Lastly, there are reports indicating that the Bank of Japan may raise interest rates later this month for the first time since 2007. Such a significant policy shift from a major central bank could increase cross-currency volatility and affect global liquidity. This adds more complexity to the market and emphasizes the potential benefits of using derivatives to hedge or speculate on increased market fluctuations. Create your live VT Markets account and start trading now.

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