On Thursday, gold prices in India saw an increase, as noted by FXStreet.
The price of gold rose to INR 11,962.75 per gram, up from INR 11,876.92 the day before.
For tola, the price climbed to Rs 139,528.90 from Rs 138,527.80 the previous day.
| Unit Measurement | Gold Price in INR |
|---|---|
| 1 gram | 11,962.75 |
| 10 grams | 119,630.50 |
| Tola | 139,528.90 |
| Troy Ounce | 372,083.30 |
Market Drivers: Gold’s Resilience Amid Global Trends
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The federal government has extended its partial shutdown for another three weeks, leaving the situation unresolved. A vote on a Republican-led bill for funding to reopen the government failed to pass in the Senate for the ninth time.
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There are growing worries among investors that a prolonged government shutdown could impact economic performance significantly. Treasury officials have stated that the shutdown might lead to a staggering loss of $15 billion weekly in production.
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This week, US-China trade tensions have heightened, with both nations imposing reciprocal port fees. President Trump has mentioned the possibility of suspending edible oil imports from China due to their refusal to purchase US soybeans.
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While President Trump claims the US is engaged in a full-blown trade war with China, Treasury Secretary Scott Bessent has suggested that the US might lift import taxes on Chinese goods temporarily if China eases its strict export controls on rare earth elements.
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On the geopolitical front, US Secretary of Defense Pete Hegseth cautioned Russia about the potential repercussions of its ongoing aggression in Ukraine. Furthermore, President Trump hinted at supplying long-range Tomahawk cruise missiles to Ukraine.
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Federal Reserve Chairman Jerome Powell conveyed a cautious outlook, indicating that the labor market will likely remain subdued with low employment and minimal layoffs through September. This aligns with market expectations of rate cuts at the upcoming meetings.
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The U.S. dollar has continued its downward trend for the third straight day, hitting its lowest point in over a week during Asian trading hours on Thursday. This decline is contributing to the recent rise in gold prices, suggesting potential for further price gains.
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As there are no major economic announcements expected soon, speeches from influential FOMC members will be closely analyzed for hints regarding potential rate cuts. This will likely impact demand for the U.S. dollar and subsequently influence the gold market.
The gold price in India is calculated by converting the international price (USD/INR) to the local currency and measurement units. These prices are updated daily based on current market rates. They serve as a reference point, and actual local prices might vary slightly.
Gold FAQ
Throughout history, gold has been significant as a valuable asset, mainly used as a store of value and means of exchange. Today, in addition to its allure in jewelry, gold is considered a safe asset and a good investment during economic turbulence. It is often seen as a hedge against inflation and currency devaluation since its value isn’t dependent on any single government or issuer.
Central banks hold the bulk of gold reserves, typically purchasing gold to bolster their currencies during periods of instability, thereby diversifying their foreign exchange reserves. Strong gold reserves can enhance perceptions of a country’s economic stability. In 2022, central banks added 1,136 tonnes of gold, approximately valued at $70 billion, representing the highest annual purchase rate documented. Countries like China, India, and Turkey are notably increasing their gold holdings.
Gold often behaves inversely to the US dollar and US Treasuries, which are major safe-haven assets. When the dollar weakens, gold prices generally rise, as this allows for asset diversification during uncertain times. An uptick in stock markets tends to suppress gold prices, while drops in riskier markets can elevate its appeal.
Prices of gold can shift due to various factors. Geopolitical instability and recession fears often lead to a surge in gold prices as it is viewed as a safe haven. As a non-yielding asset, gold tends to appreciate when interest rates fall, though rising costs can exert pressure on its prices. Ultimately, much of the movement in the gold market hinges on the performance of the US dollar, as gold is priced in dollars. A strong dollar usually keeps gold prices down, whereas a weaker dollar can drive prices up.
(An automated tool was used to create this post.)
