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Gold Price in India Today: Gold rises, according to FXStreet data

Gold prices rose in India on Friday, according to data compiled by FXStreet.

The price of Gold stood at INR 6,210.30 per gram, compared to INR 6,188.94 on Thursday.

Gold price increased to INR 72,433.20 per tola from INR 72,186.63 per tola the previous day.

Unit of measurement Gold price in INR
1 Gram 6,210.30
10 Grams 62,102.18
Tola 72,433.20
Troy Ounce 193,172.00

FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and units of measurement. Prices are updated daily based on market rates taken at the time of publication. Prices are for reference only and local rates may differ slightly.-

Movements in world markets: Gold price on Comex lacks firm intraday direction

  • The Federal Reserve projected just one rate cut in 2024 compared to the three cuts estimated at the March meeting, which is seen as supporting the US Dollar and acting as a headwind for the non-yielding Gold price.
  • However, softer inflation numbers this week suggest the Fed could reduce borrowing costs sooner than expected, with the CME Group’s FedWatch tool indicating a higher likelihood of the first rate cut in September.
  • Data released by the US Bureau of Labor Statistics on Thursday showed that the Producer Price Index (PPI) for final demand rose 2.2% annually in May, down from 2.3% previously and up 2.5% expected.
  • Added to this is that the annual underlying PPI increased 2.3% during the reported month, below the increase in April and the market expectation of 2.4%. On a monthly basis, the PPI decreased by 0.2%, while the core PPI remained unchanged.
  • This comes on top of Wednesday’s softer CPI report, which showed consumer prices were unchanged in May for the first time since last June and the annual rate fell to 3.3% from 3.4% in April.
  • Separately, the US Department of Labor (DoL) reported that the number of Americans filing for unemployment insurance for the first time rose more than anticipated, to 242K last week from 229K previously.
  • Meanwhile, a snap election call in France sparked broader political concerns and should limit losses for the safe-haven XAU/USD against the backdrop of Russia’s ongoing war in Ukraine and conflict in the Middle East.
  • Investors now await the preliminary release of the US Michigan Consumer Sentiment Index, which could influence the USD price dynamics and produce short-term trading opportunities on the last day of the week.

Gold FAQs

Gold has played a fundamental role in human history, as it has been widely used as a store of value and medium of exchange. Today, apart from its brilliance and use for jewelry, the precious metal is considered a safe-haven asset, meaning it is considered a good investment in turbulent times. Gold is also considered a hedge against inflation and currency depreciation, since it does not depend on any specific issuer or government.

Central banks are the largest holders of Gold. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and purchase Gold to improve the perception of strength of the economy and currency. High Gold reserves can be a source of confidence for the solvency of a country. Central banks added 1,136 tons of gold worth about $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the largest annual purchase since records exist. Central banks in emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are the main reserve and safe haven assets. When the Dollar depreciates, the price of Gold tends to rise, allowing investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken the price of Gold, while sell-offs in riskier markets tend to favor the precious metal.

The price of Gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of Gold to rise rapidly due to its status as a safe haven asset. As a non-yielding asset, the price of Gold tends to rise when interest rates fall, while rising money prices tend to weigh down the yellow metal. Still, most of the moves depend on how the US Dollar (USD) performs, as the asset is traded in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold in check, while a weaker Dollar is likely to push up Gold prices.

(An automation tool was used to create this post.)

Source: Fx Street

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