Gold prices in India remained relatively stable on Thursday, with the price of Gold standing at 6,735.57 Indian Rupees (INR) per gram, which was only slightly lower compared to the previous day. The price for Gold for a tola remained broadly steady as well, at INR 78,562.38 per tola. FXStreet calculates Gold prices in India by adjusting international prices to the local currency and measurement units. These prices are updated daily based on market rates at the time of publication, although local rates may vary slightly.
Gold has historically been used as a store of value and medium of exchange, with its value transcending beyond its allure in jewelry. In turbulent times, Gold is often viewed as a safe-haven asset, making it a popular choice for investors seeking stability. Additionally, Gold serves as a hedge against inflation and depreciating currencies due to its independence from any specific issuer or government. Central banks are major holders of Gold, with many increasing their reserves in recent years to enhance their perceived economic strength and currency stability.
Central banks from emerging economies like China, India, and Turkey have significantly boosted their Gold reserves in an effort to support their currencies during times of economic uncertainty. In 2022, central banks added a record 1,136 tonnes of Gold worth around $70 billion to their reserves. Gold prices typically exhibit an inverse correlation with the US Dollar and US Treasuries, both crucial safe-haven assets. During periods of Dollar depreciation, Gold prices tend to rise, allowing investors and central banks to diversify their portfolios.
Various factors can influence the price of Gold, including geopolitical instability, fears of a recession, and interest rate movements. As a yield-less asset, Gold tends to perform well in environments of low interest rates, while higher borrowing costs can weigh it down. The performance of the US Dollar against other currencies, as Gold is priced in dollars (XAU/USD), also significantly affects its price movements. A strong Dollar usually keeps Gold prices in check, whereas a weaker Dollar tends to push Gold prices higher.
Overall, Gold continues to be a significant asset for investors and central banks seeking stability and diversification in their portfolios. Its status as a safe-haven asset makes it a valuable resource during times of economic volatility and uncertainty. With central banks increasing their Gold reserves and Gold prices remaining relatively stable, it is evident that the precious metal will continue to play a crucial role in the global economy.
