Gold prices in India fell on Monday, with the price per gram standing at 7,455.15 Indian Rupees (INR), down from INR 7,467.92 on Friday. The price per tola decreased to INR 86,954.76 from INR 87,104.32 on Friday. Gold prices in India are calculated by adapting international prices to the local currency and measurement units, with prices updated daily based on market rates at the time of publication.
Gold has played a key role in human history as a store of value and medium of exchange. Apart from its use in jewelry, gold is widely seen as a safe-haven asset, making it a good investment during turbulent times. It is also viewed as a hedge against inflation and depreciating currencies.
Central banks are the biggest gold holders, adding 1,136 tonnes worth about $70 billion to their reserves in 2022, the highest yearly purchase since records began. Central banks from emerging economies such as China, India, and Turkey are rapidly increasing their gold reserves to support their currencies during turbulent times. Gold has an inverse correlation with the US Dollar and US Treasuries.
When the Dollar depreciates, gold tends to rise, allowing investors and central banks to diversify their assets. Gold is also inversely correlated with risk assets, with a rally in the stock market tending to weaken gold prices, while sell-offs in riskier markets favor gold.
Gold prices dip on Monday
Gold prices can be influenced by several factors, including geopolitical instability, fears of a deep recession, interest rates, and the behavior of the US Dollar. A strong Dollar generally keeps gold prices controlled, whereas a weaker Dollar is likely to push gold prices up. India’s deep-rooted fascination with gold has made it one of the largest importers of the metal, serving as a symbol of wealth and security and playing a crucial role in the country’s cultural and religious practices.
The demand is particularly high during the festive and wedding seasons. Gold rate trends in India have historically been influenced by a range of factors, including global market fluctuations, domestic economic conditions, currency exchange rates, inflation, supply and demand, government policies, and interest rates. Understanding these factors can help manage expectations and make more informed investment decisions regarding gold.
In the domestic market, gold futures were up 1.4 percent while silver futures increased by 3.7 percent. Traders might consider taking long positions based on this upward trend. Gold futures have advanced further in positive momentum, with the broader bias remaining bullish as long as the support at ₹75,000 holds.
Silver futures broke the resistance at ₹90,200 last week, with the potential to reach ₹96,500 soon. This outlook suggests a gradual uptick ahead for both gold and silver in the domestic futures market. Investors may consider these strategies to benefit from the positive momentum in precious metals.