Gold prices in India experienced a notable surge on Wednesday, according to data from FXStreet. The price per gram of gold reached 11,654.24 Indian Rupees (INR), marking a significant increase from the previous day’s rate of 11,578.50 INR. This upward trend is further emphasized by the price per tola, which climbed to 135,934.80 INR, up from 135,049.40 INR the day prior.
FXStreet’s comprehensive data platform offers daily updates on gold prices, calculated by converting international prices (USD/INR) into the local currency and measurement units. It’s important to note that these prices serve as a reference, and local rates may vary slightly.
Gold, a timeless asset, has played a pivotal role in human history, serving as both a store of value and a medium of exchange. Its allure extends beyond its aesthetic appeal and jewelry applications; it is now widely regarded as a safe-haven asset, particularly during economic turmoil. This perception makes gold an attractive investment option.
Central banks, the largest holders of gold, play a crucial role in bolstering their currencies during challenging times. They achieve this by diversifying their reserves and purchasing gold to enhance the perceived strength of their economies and currencies. High gold reserves can instill confidence in a country’s financial stability. In 2022, central banks acquired an impressive 1,136 tonnes of gold, valued at approximately $70 billion, according to the World Gold Council. This marks the highest annual purchase since records began.
Emerging economies like China, India, and Turkey are rapidly increasing their gold reserves, underscoring the metal’s importance in global finance. Gold’s relationship with the US Dollar and US Treasuries is inverse; when the dollar depreciates, gold tends to rise, offering investors and central banks a means to diversify their assets during turbulent times. Additionally, gold’s correlation with risk assets is inverse; stock market rallies can weaken gold prices, while market sell-offs favor the precious metal.
Several factors influence gold prices, including geopolitical instability and recession fears, which can drive prices higher due to gold’s safe-haven status. As a yield-less asset, gold benefits from lower interest rates, while higher interest rates can exert downward pressure. Ultimately, the US Dollar’s performance is a key determinant, as gold is priced in dollars. A strong dollar tends to control gold prices, while a weaker dollar propels them upward.