Gold prices rose in India on Friday, according to data compiled by FXStreet.
The price for Gold stood at 9,419.95 Indian Rupees (INR) per gram, up compared with the INR 9,395.92 it cost on Thursday.
The price for Gold increased to INR 109,873.90 per tola from INR 109,592.20 per tola a day earlier.
| Unit measure | Gold Price in INR |
|---|---|
| 1 Gram | 9,419.95 |
| 10 Grams | 94,199.80 |
| Tola | 109,873.90 |
| Troy Ounce | 292,993.50 |
Daily Digest Market Movers: Gold price benefits from the emergence of fresh USD selling; bulls lack conviction
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Traders trimmed their bets for a more aggressive policy easing by the Federal Reserve following the hotter-than-expected release of the US Producer Price Index on Thursday. The US Bureau of Labor Statistics reported that the headline PPI accelerated from the 2.4% YoY rate to 3.3% in July, surpassing expectations of a 2.5% by a wide margin.
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The US Dollar rebounded sharply from the vicinity of its lowest level since July 28, touched on Wednesday, and triggered an intraday turnaround of around $45 in the Gold price. The USD recovery, however, runs out of steam during the Asian session on Friday as traders are still pricing in a 90% chance that the Fed will cut interest rates in September.
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Moreover, the CME Group’s FedWatch Tool indicates the possibility of two 25-basis-point Fed rate cuts by the end of this year. This, in turn, keeps a lid on any further USD appreciation and acts as a tailwind for the non-yielding yellow metal during the Asian session. However, the prevalent risk-on environment caps gains for the safe-haven commodity.
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An extension of the US-China tariff truce for another three months eased concerns about a full-blown trade war between the world’s two largest economies. Furthermore, hopes that Friday’s US-Russian summit will increase the chances of ending the prolonged war in Ukraine remain supportive of the bullish sentiment across the global financial markets.
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Traders now look forward to the US economic docket – featuring the release of monthly Retail Sales figures, the Empire State Manufacturing Index, followed by the University of Michigan Consumer Sentiment and Inflation Expectations Index. The data might influence the USD and provide some impetus to the XAU/USD pair heading into the weekend.
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Nevertheless, the precious metal remains on track to register losses for the first time in three weeks, and the lack of strong follow-through buying suggests that the path of least resistance remains to the downside. Hence, any subsequent move up could be seen as a selling opportunity and runs the risk of fizzling out rather quickly.
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling 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 Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
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