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Gold prices in India increased on Monday, with a gram priced at 12,044.49 Indian Rupees (INR), up from INR 12,006.87 previously. The price for a tola also rose to INR 140,487.90 from INR 140,045.70.
FXStreet provides daily updated Gold prices, converting from international prices (USD/INR) to the local currency. These prices are for reference, and actual rates may vary slightly in local markets.
Gold As A Safe Investment
Gold, an asset seen historically as a store of value, is considered a safe investment during uncertain times. Central banks are major purchasers of Gold, diversifying reserves to support currency strength.
The price of Gold is influenced by geopolitical tensions and economic conditions. It typically rises with lower interest rates and a declining US Dollar, which is the currency Gold is priced in globally. Central banks globally added 1,136 tonnes of Gold to reserves in 2022.
Gold also exhibits an inverse correlation to the US Dollar and Treasury assets, rising when these decline. In times of economic instability or stock market sell-offs, Gold is perceived as a stable investment.
With Gold rising today, we are seeing the classic inverse relationship with the US Dollar play out. The Dollar Index (DXY) recently broke below the key 102 level for the first time since July, following last week’s weaker-than-expected US retail sales figures. This greenback weakness is providing a direct tailwind for dollar-denominated assets like gold.
Market Sentiment And Geopolitical Influence
Market sentiment is shifting based on expectations of future monetary policy from the Federal Reserve. Looking back, we saw the Fed hold rates steady throughout 2024 and most of 2025, but recent PMI data showing a contraction in manufacturing has traders pricing in potential rate cuts for the first half of 2026. As a yield-less asset, gold becomes more attractive as the opportunity cost of holding it decreases with falling interest rates.
Geopolitical tensions are also adding to gold’s safe-haven appeal. Ongoing trade friction between the US and China, particularly concerning semiconductor and rare earth mineral exports, is making investors nervous about riskier assets like equities. We saw a similar flight to safety during the trade disputes that escalated back in the 2018-2019 period, which supported gold then as well.
We should also consider the steady demand from central banks, which has created a strong floor for prices. Following the record-breaking purchases we observed in 2022, the World Gold Council’s report for 2024 confirmed that emerging market central banks continued to add to their reserves at a historic pace. This consistent buying provides underlying support against any significant price drops.
For derivative traders, this environment suggests looking at strategies that profit from continued upward momentum and potential volatility. Buying call options on gold futures or gold-backed ETFs could offer a way to capitalize on further price gains while defining your maximum risk. Given the market’s focus on future Fed action, contracts expiring in the March-to-June 2026 timeframe may be worth considering.
