BRAND CONNECT
July 08, 2024 / 04:20 PM IST
Have you also wondered why the price of gold fluctuates daily? Well, you’re not alone. The constant changes in the prices are puzzling. Today gold rate in Delhi is around Rs. 74,500 for 24K gold. Tomorrow it might slightly increase or decrease based on so many factors. It can seem daunting, but if you want to buy gold coins or even gold jewellery as a matter of fact understanding these fluctuations is important to help you call the right shots. Let’s understand how these rates fluctuate and based on what factors.
1. International market trends
Like all commodities, international trends in the world market also have a huge impact on Indian gold prices. Gold prices increase in India when there’s an increase in global demand. Apart from this direct relation, there are a few more dependencies:
US dollar: The US dollar is used as a medium of exchange for gold, so changes in the value of the dollar have an immediate effect on gold prices.
Geopolitical situations: Historically the gold prices have always spiked when the stock market crashes amidst political unrest or conflicts in major economies.
Economic data: Employment, inflation, and growth reports from the top 10 economies bear some effect on global gold prices.
2. Local ecosystem demand and supply
Today gold rate in Kolkata is heavily impacted by the local market demand and supply chain as well.
Wedding and festival seasons: Since our country has a deep cultural connection with gold, especially around festivals and weddings. These times can see price increases due to increased demand.
Local Sona bazar: Sona Bazars are the local jewellery markets in India. Prices for gold are also influenced by the demand for gold jewellery in regional markets.
Gold import rates: A major chunk of India’s gold is imported, adjustments to import taxes or regulations may have an immediate impact on local pricing.
3. Currency exchange rates
Here’s yet another crucial factor, the Indian rupee’s exchange value against the US dollar. Since gold is imported USD, a lower value of rupee means buying expensive gold. In contrast, when rupee rises we get gold at cheaper prices.
4. Interest rates and inflation
Interest rates and inflation are two interdependent factors that influence gold prices.
– Interest Rate: When interest rates are high, investors prefer interest-bearing assets such as fixed deposits and bonds, reducing demand for gold and further depressing prices.
– Inflation: For decades, gold has been used as an inflation hedge. As inflation rises, the value of the rupee diminishes, but the appeal of gold increases dramatically.
5. Government policies and taxes
Government rules and policies may have an impact on the current gold rate in Delhi and Kolkata. Here are some crucial points:
– Import duties: To regulate the flow of gold into the country, the government occasionally adjusts import duties. Higher import tariffs increase the cost of gold.
– Taxes: Goods and Services Tax (GST) on gold jewellery and other gold items might influence the final price consumers pay.
6. Investment demand
The demand for gold as an investment is another important consideration. Gold is regarded as a secure investment in uncertain times, so when the stock market is volatile or there is economic instability, more individuals buy in gold, driving up prices. Conversely, when the economy is steady and stock markets perform well, investor demand for gold may fall, resulting in cheaper prices.
By keeping an eye on these factors and checking the live gold rates on the Bajaj Finance website you stay updated and make the right investment decisions. Apart from this if you need immediate funds you can always consider the Bajaj Finserv Gold Loan. Get instant funds of up to Rs. 2 crore by leveraging your gold jewellery while still holding onto them.
Moneycontrol Journalists are not involved in creation of this article.