Gold prices in India were broadly unchanged on Monday, based on FXStreet data. Gold was priced at INR 14,087.38 per gram, compared with INR 14,087.50 on Friday.
Gold was also steady at INR 164,312.50 per tola, versus INR 164,313.90 on Friday. Other listed prices were INR 140,875.80 for 10 grams and INR 438,165.40 per troy ounce.
FXStreet derives India gold prices by converting international prices using USD/INR and local units. Prices are updated daily at the time of publication and are for reference, as local rates may differ slightly.
Central banks are the largest holders of gold. They added 1,136 tonnes worth around $70 billion in 2022, according to the World Gold Council, the highest annual total since records began.
Gold often moves inversely to the US Dollar and US Treasuries and can also move opposite to risk assets. Price drivers include geopolitical risks, recession fears, interest rates, and the US Dollar, as gold is priced in dollars (XAU/USD).
Given the current stability in gold prices, we see a market pausing before its next significant move. The precious metal is a safe-haven asset, but its traditional inverse relationship with the US Dollar is being tested. We believe this indicates that other factors, like geopolitical tensions, are becoming more influential for traders.
Looking back, we saw how central bank purchases provided a strong floor for prices throughout 2025, continuing the record-breaking buying spree from previous years. The World Gold Council reported that central banks added over 1,000 tonnes for the third consecutive year in 2025, showing a clear trend of de-dollarization. This persistent demand suggests that buying protective call options to guard against sudden price spikes could be a prudent strategy.
However, uncertainty around interest rate policy presents a key risk. The US Federal Reserve has signaled a slower pace of rate cuts than anticipated at the start of the year, with markets now pricing in just a 50% chance of a cut before the fourth quarter. This higher-for-longer rate environment could strengthen the dollar and weigh on gold, making protective put options an equally important consideration for hedging.
This tug-of-war between strong central bank demand and hawkish monetary policy creates an environment ripe for volatility. The CBOE Gold Volatility Index (GVZ) has been trending near its 12-month average, suggesting the market may be underpricing the potential for a sharp move. Therefore, traders might consider strategies like a long straddle, which profits from a significant price swing in either direction.
Furthermore, we must watch the performance of riskier assets like stocks. Any sign of a sell-off in equity markets, driven by fears of an economic slowdown, would likely trigger a flight to safety. This would benefit gold, reinforcing its role as a key portfolio diversifier in turbulent times.
