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Gold Rate in India
India is the largest consumer of gold in the world, accounting for almost a quarter of the world’s total consumption. It has, since long, maintained this position and, unlike countries like China, India uses gold primarily in the form of jewelry and investments. It is viewed as a solid instrument for investments and even traders who are into commodities trading, invest in gold bullion. These investments are usually dictated by the gold rates prevailing in the economy at that time.
Even the global view of gold is that of a safe haven where you can invest even when investments in the economy of a country are not a good idea. This is because it is believed that this commodity always appreciates.
Trend of Gold Rate in India for April 2017 (rates per gram for 24karat gold)
April 2017 - Week 1 (1st-9th)
- Gold price in India in the first week of April were on the rise due to increased purchasing from industrial as well as retail sectors.
- Gold traded at Rs.2,991 per gram on the first day of the month of April.
- Due to steady demand from both domestic and international markets, the rate of gold was steady at Rs.2,991 per gram until the 3rd of April.
- As the week progressed, the rate of gold continued to increase due to increased offtake.
- The rate of gold was Rs.3,003 per gram between the 4th of April to the 7th of April.
- However, a marginal decline was noted in the gold rate in India during the last two days of the month with this precious metal trading at Rs.2,983 per gram.
April 2017 - Week 2 (10th-16th)
- Gold price in India endured a good time over the second week of April.
- On 10th, the metal was priced at Rs.2,956 per gram, which then went up to Rs.2,963 per gram on 11th.
- As there were plenty of global issues, markets became volatile, which sent gold prices up by Rs.38 to Rs.3,001 per gram on 12th.
- Gold rate in India went up again on 13th, as domestic demand kept going up, to reach Rs.3,018 per gram - an increase of Rs.17 per gram.
- Due to demand holding steady, prices rose for the 5th consecutive time this week to reach Rs.3,028 per gram.
- Prices rose on the last day of April week 2 as well as the metal was seen trading at Rs.3,040 per gram.
- Overall, the second week of April was very productive for gold trading, as prices rose by Rs.84 from the start to the end.
April 2017 - Week 3 (17th-23rd)
- The rate of gold in India during the third week of April was relatively stable due to steady demand for this precious metal.
- Gold traded higher in early trade due to rising tensions in North Korea and Syria, resulting in investors being driven to safe haven assets.
- Gold traded at Rs.3,057 per gram on the 17th of April. This rate was noted until the 21st of April due to steady demand for this metal.
- However, due to rise in the demand on the 22nd as well as geopolitical tensions, the price of gold rose to Rs.3,062 per gram and stayed steady at this rate until the end of the week.
Trend of Gold Rate in India for March 2017 (rates per gram for 24 karat gold)
|March 1st Rate||Rs.2,994 per gram|
|March 31st Rate||Rs.2,942 per gram|
|Highest Rate in March||Rs.2,994 per gram on 1st March|
|Lowest Rate in March||Rs.2,906 per gram on 15th March|
March 2017 - Week 1 (1st - 4th):
- Gold prices in India seemed to dwindle during the first week of March.
- On 1st, gold was trading at Rs.2,994 per gram and went down slightly to Rs.2,992 per gram.
- The 3rd saw gold prices drop in the country as dollar began to strengthen significantly to end the day at Rs.2,961 per gram.
- The first week of March ended with gold prices picking up slightly to reach Rs.2,972 per gram.
March 2017 - Week 2 (5th - 11th):
- The second week of March gave way to full of ups and downs with regards to gold rates.
- On 5th, gold was priced at Rs.2,972 per gram but went down marginally to Rs.2,971 per gram on 6th.
- The 7th saw gold prices dip significantly by Rs.27 as it went down to Rs.2,944 per gram and dropped again on 8th to hit Rs.2,931 per gram.
- After the decrease over the previous two days, gold prices picked up on 10th to reach Rs.2,951 per gram.
- The increase on 9th seemed like a false hope as an increase in US dollar value saw prices dip again.
- On 10th, gold in India was priced at Rs.2,931 per gram and went up by Rs.14 to end the week at Rs.2,945 per gram.
March 2017 - Week 3 (12th-18th):
- Gold prices in the third week of March were on the increase due to increased purchasing from industrial as well as retail sectors.
- Gold traded at Rs.2,971 per gram on the first day of the third week of March.
- Despite seasonal demand, the price of gold dropped by Rs.20 the next day to trade at Rs.2,951 per gram.
- The rate of gold continued to decline over the next two days owing to a fall in demand from markets overseas.
- On the 17th of March, rate of gold recovered marginally to trade at Rs.2,970 per gram.
- Gold traded at Rs.2,971 per gram on the last two days of the month owing to steady demand from domestic markets.
March 2017 - Week 4 (19th-25th):
- Gold rates saw some fluctuations during the fourth week of March owing to various factors like Donald Trump’s travel ban and a strengthening dollar.
- The week started on 20th with gold trading at Rs.2,941 per gram but fell to Rs.2,933 per gram on 21st as demand went down.
- On 22nd, gold prices consolidated to rise by Rs.44 per gram, thereby ending the day at Rs.2,977 per gram.
- The 23rd saw a slight decline in gold prices as dollar seemed to strengthen marginally.
- Gold was trading at Rs.2,973 per gram when 23rd came to an end and went down to Rs.2,965 per gram on 24th.
- On 25th, prices went down marginally by Rs.1 to hit Rs.2,964 per gram and remained unchanged at the end of the week on 26th.
March 2017- Week 5 (26th-31st):
- Gold rate in India fell over the last four days of March as demand for the metal seemed to decline.
- When business day started on 27th, gold was trading at Rs.2,979 per gram.
- The 28th saw gold prices drop to Rs.2,974 per gram even though rates were constant in the global market.
- Gold price in India took a hit on 29th, this time by Rs.12 to reach Rs.2,962 per gram and decreased again on 30th to reach Rs.2,960 per gram.
- Bullion saw its highest price decrease for the week as it went down by Rs.18 per gram to trade at Rs.2,942 per gram.
|February 1st Rate||Rs.3,035 per gram|
|February 28th Rate||Rs.3,101 per gram|
|Highest Rate in February||Rs.3,101 per gram from 25th-28th February|
|Lowest Rate in February||Rs.3,034 per gram on 4th & 5th February|
February 2017 - Week 1 (1st-4th):
- When the week began on 1st, gold was trading at Rs.2,957 per gram and continued at the same rate on 2nd as well.
- As global demand fell slightly amidst strengthening dollar, gold prices fell to Rs.2,940 per gram on 3rd.
- The 4th saw prices increase slightly to end the first week of February at Rs.2,944 per gram.
February 2017 - Week 2 (5th-11th)
- The price of gold in the second week of February was stable, with gold trading at Rs.3,034 per gram on 5th February on sustained demand from the domestic market.
- Prices increases the following day, trading at Rs.3,044 per gram, an increase of Rs.10 per gram as market fluctuations led to an increase in demand.
- The price rose to Rs.3,075 per gram on 7th February as the U.S. Dollar weakened due to continued instability arising out of uncertainty regarding the travel and immigration ban in the United States.
- Prices were stable for a few days before falling to Rs.3,068 per gram on 11th February, recording an increase in price of Rs.34 per gram over the week.
February 2017 - Week 3 (12th-18th)
- Gold prices in the third week of February were on the increase due to increased buying from the retail and industrial sectors.
- Gold was priced at Rs.3,048 per gram on 12th February, decreasing marginally from the previous week due to a drop in demand.
- Gold traded at Rs.3,044 per gram on 13th February, with prices falling marginally in spite of seasonal demand.
- Prices were constant till 15th February, after which gold traded at Rs.3,045 per gram as demand rose.
- Gold traded at Rs.3,070 per gram on 17th February and remained constant the following day.
February 2017 - Weeks 4 & 5 (19th-28th)
- The price of gold in the last two weeks of February did not see much fluctuation as demand was steady, which kept prices stable.
- Gold traded at Rs.3,070 per gram on 19th February, with the price remaining constant till 24th February due to consistent demand.
- Gold prices fluctuated in the international market due to markets dipping, but prices were unaffected due to high local demand.
- Gold rose to Rs.3,101 per gram on 25th February as demand increased overseas.
- The month ended with gold trading at Rs.3,101 per gram on 28th February, an increase of Rs.31 per gram over the week.
|January 1st Rate||Rs.2,893 per gram|
|January 31st Rate||Rs.3,017 per gram|
|Highest Rate in January||Rs.3,060 per gram on 23rd & 24th January|
|Lowest Rate in January||Rs.2,841 per gram on 10th & 11th January|
January 2017 - Week 1 (1st to 7th)
- The new year came like a breath of fresh air for gold in India as prices increased gradually over the week.
- When new year’s day began on the 1st, gold began to trade at Rs.2,821 per gram.
- The next day on the 2nd, gold prices increased by Rs.7 to trade at Rs.2,828 per gram, which trickled on to the 3rd as well.
- On the 4th, gold prices increased significantly by Rs.29 for the metal to trade at Rs.2,857 per gram and increased by Re.1 on the 5th to trade at Rs.2,858 per gram.
- New year seemed to improve buyers’ sentiments as prices went up further more to trade at Rs.2,869 per gram.
- At the end business day on the 7th, gold prices had increased again to cap off at Rs.2,872 per gram.
January 2017 - Week 2 (8th to 15th)
- Gold prices in the second week of January improved as demand was high, with gold trading at Rs.2,937 per gram on 8th January.
- Prices fell to Rs.2,841 per gram on 10th January as demand fluctuated due to a recovering U.S. Dollar, which made imports expensive.
- Prices jumped towards the middle of the week, as gold capitalised on unstable markets, rising to Rs.2,990 per gram on 12th January, an increase of Rs.59 per gram.
- Prices remained unchanged as the week drew to a close, with gold trading at Rs.2,990 per gram on 15th January, with the price rising by Rs.63 per gram.
January 2017 - Week 3 (15th to 21st):
- Gold rates seemed to be on the up and up for much of week 3 before seeing some fluctuations during the latter half of the week.
- The week began with gold trading at Rs.2,941 per gram.
- On 16th, gold prices increased and was seen trading at Rs.2,955 per gram which again went up to Rs.2,969 per gram on the 17th.
- Prices went up slightly to Rs.2,971 per gram on the 18th as global demand seemed to be on the rise.
- However, prices plummeted to Rs.2,951 per gram on the 19th and remained the same till the closing hours of the 20th.
- Prices increased again to hit Rs.2,962 per gram to end the week on a positive note.
January 2017- Weeks 4 & 5 (22nd to 31st)
- Gold prices increased during the week due to high demand from industry as well as market fluctuations.
- Gold traded at Rs.3,024 per gram on 22nd January, with the price rising to Rs.3,060 per gram on 23rd January due to a sudden spurt in gold purchases from Asia.
- Prices dipped to Rs.3,032 per gram on 25th January as domestic demand fell due to a rally by the stock markets, pushing demand for bullion low.
- In spite of fluctuations in the U.S. market due to confusion over implementation of an immigration ban, gold prices were low due to poor trading before the Lunar New Year.
- Gold ended the week trading at Rs.3,017 per gram on 31st January.
|December 1st Rate||Rs.2,963 per gram|
|December 31st Rate||Rs.2,893 per gram|
|Highest Rate in December||Rs.2,963 per gram on 1st and 2nd December|
|Lowest Rate in December||Rs.2,825 per gram on the 22nd and 23rd December|
December 2016 - Week 1 (1st to 4th)
- Gold rates were holding steady and saw very little fluctuations over the course of the week.
- While the demand was high initially, demonetization seems to have reduced tendency to buy more gold.
- In fact, gold rates saw little to no change over the first four days of december as buying gold became a lot harder.
- Besides, as base metal rates took a downward turn in the global market, the same effect took over in India too.
- Possible forecast suggested that rates would more and less remain unchanged for the coming weeks.
December 2016 - Week 2 (5th-11th)
- Gold rates saw a few surges—both up and down—for most of this week.
- At the beginning of the week on December 5th, gold traded at Rs.2,869 per gram and continued at the same rate for December 6th too.
- On December 7th, gold prices increased marginally and began to trade at Rs.2,972 per gram—a Rs.3 increase from the previous two days.
- December 8th saw a considerable decrease in trading prices as they went down by Rs.9 to hit Rs.2,963 per gram.
- The subsequent day on December 9th again saw a sizeable downsurge in gold trading prices as they went down by Rs.12 to trade at Rs.2,951 per gram
- December 10th and 11th saw the biggest of price fall as gold began trading at Rs.2,936 per gram for much of the two days, till the closing hours of the week.
- Possible forecast suggested that prices would climb further down over the coming weeks as central government’s strike on black money has crippled purchases massively.
December 2016 - Week 3 (12th to 18th)
- Demand for gold seemed to maintain a steady rate for much of the week.
- At the beginning of the week on the 12th, gold traded at Rs.2,836 per gram and continued to remain the same till the end of the 14th.
- On the 15th, prices saw a stark decrease as gold began to trade at Rs.2,800 per gram.
- Prices again fell on the 16th as gold traded at Rs.2,785 per gram.
- Demand for gold slightly increased as prices hit Rs.2,781 per gram on the 17th and remained the same at the end of the week on the 18th.
December 2016 - Week 4 (19th to 25th)
- The 4th week of December saw some minor fluctuations throughout the week.
- Demonetisation still had a firm grip on dwindling gold sales even after a month and a half.
- On the 19th, at the beginning of the week, gold traded at Rs.2,790 per gram.
- The next day, on the 20th, prices decreased by Rs.10 as gold traded at Rs.2,780 per gram.
- On the 21st, gold prices hit Rs.2,782 per gram before decreasing down to Rs.2,767 per gram on the 22nd.
- Prices went up by Re.1 on the 23rd as gold traded at Rs.2,783 per gram.
- At the end of the week, prices of gold held steady at Rs.2,773 per gram which remained so till the closing hours of the 25th.
December 2016 - Week 5 (26th to 31st)
- Gold rates saw minor changes during the week.
- With the monetary markets still recovering from the effects of demonetisation, gold was trading at Rs.2,775 per gram on 26th December.
- Prices rose marginally to Rs.2,780 per gram on 27th December as the deadline for depositing old de-monetised currency loomed.
- Prices continued to rise as market fluctuations resulted in higher interest in gold, with prices reaching Rs.2,815 per gram on 29th December.
- Prices rose to Rs.2,830 per gram on 31st December as gold closed the year on a high.
|1st November rate||Rs.3,099 per gram|
|30th November rate||Rs.2,941 per gram|
|Highest rate in November||Rs.3,213 per gram on 5th and 6th November|
|Lowest rate in November||Rs.2,929 per gram on 25th to 27th November|
November '16 - Week 1 (1st to 6th)
- Demand for gold had increased in the domestic market on account of the festive season.
- Demand is expected to stay high in light of the upcoming wedding season.
- Gold prices climbed up this week as global trends also worked in favor of the metal.
- The U.S. Federal Reserve was hawkish about the rate hike happening by the end of this year as the U.S. economy gained momentum and inflation picked up.
- Investors watch the U.S. presidential elections closely as the outcome could greatly affect the dollar.
November '16 - Week 2 (7th to 13th)
- This week was a riot for gold prices with heavy fluctuations through the week.
- At the start of the week, gold rates were on the rise on account of the wedding demand in the domestic market.
- Gold rates soon start to drop as the outcome of the U.S. presidential elections was uncertain.
- The U.S. Federal Reserve was certain of a rate hike in December as the economy was strong, the dollar gained strength, the targeted inflation rate of 2% was almost achieved, and job data was positive.
- In the domestic market, there was a spike in gold sales momentarily as people rushed to buy gold after PM Modi announced that Rs.500 and Rs.1,000 notes would not be legal tender.
- Prices soon started to drop as people were unable to purchase gold with cash in the domestic market, but gold prices started to rise in the overseas market as the dollar lost strength post Donald Trump’s election.
November '16 - Week 3 (14th to 20th)
- Gold prices declined drastically this week despite positive global trends.
- Following Donald Trump’s election, investors flocked to buy gold for its safe-haven appeal as uncertainty loomed around the U.S. economic policies.
- In India, Prime Minister Modi’s demonetisation scheme was in full swing and took its toll on the economy.
- With a shortage of cash supply, strict PAN card requirements, and tax evasion fears, people were reluctant to buy gold.
- Jewellers and retailers complained of empty showrooms and shops as people were unable to use their black money to make high-value purchases.
- The wedding season demand helped gold prices stabilise.
November '16 - Week 4 and 5 (21st to 30th)
- The dollar gained strength in the global market backed by positive economic data from the U.S.
- The Federal Reserve was confident about an interest rate hike in December which led to investors retreating to the sidelines.
- Gold rates plunged through the week as demand in the domestic and global market was muted.
- In the domestic market, as the demonetisation scheme plays out, the nation faces a cash crunch due to shortage of currency in banks and ATMs.
- Demand for silver picked up in the last week of November as demand increased.
|1st October rate||Rs.3,205 per gram|
|31st October rate||Rs.3,099 per gram|
|Highest rate in October||Rs.3,205 per gram on 1st to 4th October|
|Lowest rate in October||Rs.3,088 per gram on 6th October to 25th October|
October '16 - Week 1 (1st to 7th)
- Though the interest rate hike by the U.S. Federal Reserve has put a hold till December, expectations have sprouted again as a further delay in the hike could lead to other problems for the economy.
- Appetite for gold was expected to rise this season in the domestic market, however, jewellers and retailers have not seen a rise in the footfall of customers.
- With domestic demand being mute and global trends being negative, gold prices plummeted to very low rates this week.
- With low rates arriving just in time for Diwali, demand is expected to be high during Dhanteras and Navaratri.
October '16 - Week 2 (8th to 14th)
- Gold rates grew stronger this week as prospects of the U.S. Fed rate hike moved at a slow pace.
- Low gold prices have encouraged customers to start their festive shopping early.
- Retailers and jewellers also increased their intake to meet festive demand.
- Gold rates buckled under the pressure of weak global trends towards the end of the week.
- In the domestic spot market, there was a reduction in demand from retailers and jewellers.
- As prices drop, hopes have been placed on demand to pick up during the festive season.
October '16 - Week 3 (15th to 21st)
- There was little talk of the interest rate hike by the U.S. Federal Reserve this week. Prices were affected on 17th October as expectations of the hike grew strong.
- On the domestic front, gold recovered well as the wedding season demand blossomed.
- Trends in the overseas market also firmed up.
- The trend for this week was an incline in gold prices.
October '16 - Week 4 (22nd to 28th) & Week 5 (29th to 31st)
- Gold prices rose this week as festive demand picked up in the domestic market.
- A weakening dollar pushed investors towards exchange-traded funds backed by gold.
- There was speculation that the interest rate hike by the U.S. Federal Reserve would be gradual.
- Demand for gold is expected to continue at this pace taking into consideration the wedding season.
Trading in gold is a preferred investment mode of investors who are financially savvy and have the required risk-appetite for this kind of market. It requires prudent monitoring of investments as gold prices are subject to change for many reasons. Maintaining or closing a position in this market depends on how well an investor can track, analyze and synthesize pricing information.
Some of the key factors that affect gold prices are outlined below:
- Import costs: Since demand is primarily met through gold imports, import costs affect gold rates. Higher the costs, higher the price of gold.
- Interest rates on bank fixed deposits: Bank FDs are the go-to investment option for Indians. It is only rivalled by investments in gold. When FD rates fall, investors prefer moving their money to gold. Hence, the demand for gold rises and thereby prices.
- Strength of the US dollar: When the US dollar weakens, gold rates in India rise and when the US dollar strengthens, gold prices in India fall. This is because central banks which maintain US dollar reserves tend to hedge against risks of a devaluing dollar by investing in gold. This pushes prices up. Also, India buys its gold from foreign countries and when the US dollar strengthens against the Indian rupee, it makes purchases of gold (usually done in USD), more expensive.
- Global economic stability: Gold prices rise during times of economic instability as gold is considered safer asset that others and people tend to move their money out of riskier assets into gold. Other assets bear the risk of being significantly devalued whereas gold which is has high liquidity continues to hold value even during times of crisis.
- Seasonality: In India, demand for gold during festivals, marriages and other auspicious occasions. Prices tend to be higher during these times.
- Inflation: Since gold is bought to hedge against inflation, gold prices tend to rise when inflation is on an upward trend.
- International prices: In general, when gold rates are on an upward trend, globally, gold prices in India also move upwards. Many central banks, especially in the US and in Europe hold huge gold reserves. When these banks or other financial organizations buy more gold, prices move upward.
International gold prices are hugely affected by the prices fixed on the London Gold Market, twice a day i.e. once at 10:30 a.m. and once at 3 p.m. USD is the currency generally used when quoting prices although it is fixed in Pound Sterlings and Euros as well.
- Production costs: Mining companies increase prices at times on account of production costs. This is reflected in the price of gold imported in India.
- Supply: Domestic production and supply is limited in India. Supply constraints can push prices upwards. Similarly, lower supplies of gold globally can make the metal dearer in India.
Gold rates vary across different cities in India. Key reasons for this are:
- Taxes: State taxes differ from state to state. Some states levy higher taxes than others. This is one of the reasons why gold is more expensive in some cities than others.
- Demand: Owing to different population sizes and varying demographics, demand for gold also varies. Discounts are usually offered on larger volumes. So gold prices in cities like Mumbai are lower given larger quantums of transactions.
- Carriage: Indian imports a bulk of its gold requirements by sea. Gold prices at port cities e.g. Chennai are lower than those in interior cities e.g. Delhi because of the absence of inland transport charges.
- Local associations: Cities have their own local gold associations which have a say in setting the prices. This will also account for differences in gold prices between cities.
Gold is measured in grams and troy weight. (Troy ounces, million ounces, grams, kilograms, tonnes, short tonne, metric tonnes, tolas etc.)
Karat is used to represent purity when gold is mixed or alloyed with other base metals such as copper. 24K or 24 karat gold is pure gold. Fineness is to represent gold parts per thousand. (18K gold would be 18 of 24 karats out of 1,000 parts or a fineness of 750).
Carat - It is a unit of weight used to measure precious gems such as diamonds as well as pearls. 200 milligrams or 0.2 grams make a metric carat. Carats are abbreviated to ct. Carats are often mistaken to denote size.
Karat - It is a unit of finesse or purity used to measure gold. 24 karat gold denotes pure gold. When gold is mixed with another metal the purity is diluted. The purity is then expressed as the parts of gold out of 24. E.g. 22 karat gold (mixed with copper) will be 22 parts gold and 2 parts copper. Gold being soft is alloyed with another metal, usually copper, to attain form. Karat is abbreviated to kt.
Karats represent the finesse or purity of gold. Gold being a very malleable metal is too soft to attain form on its own. It is usually alloyed with another metal, mostly copper, in order to attain form. The purity of the gold is then represented in karats as the parts of gold present out of 24.
24 karat gold is 99.99% pure gold whereas 22 karat gold is 91.67% pure. 22 karat gold means, the alloy consists of 22 parts gold and 2 parts of the alloyed metal.
24k gold is priced higher than 22k gold being purer, however, some people prefer 22k gold being more durable. Import duties are generally lower for 24k gold and higher for 22k gold.
India’s primary demand for gold is for use as jewelry. Investments are the next greatest demand driver. Unlike China, the next highest consumer of gold in the world, whose primary demand for gold is for industrial purposes, India’s industrial usage of gold is minimal.
Domestic production of gold in India is limited and, given its strong demand, India relies heavily on gold imports every year. Currently, the Kolar mines in Karnataka are the only operational mines in India, grossly unable to meet domestic demand.
Gold imports in India constitute the next largest chunk of total imports after crude oil. Of late, the government has increased its focus on curbing the negative impact of heavy gold imports viz. a widening trade deficit and rupee devaluation.
Gold is considered valuable for many reasons, mainly
- Value: Although gold prices fluctuate in the near to medium term, its value tends to rise in the long-term. For this reason, people invest and hold on to gold for a long period of time. Gold tends to not be affected by geopolitical or economic turmoil. It is valuable during emergencies providing liquidity as it is easily traded. It is a hedge against inflation as well and acts as a great value addition to an investor’s portfolio.
- Industrial uses: Gold is used in certain manufacturing processes. Although not comparable to retail consumption, many countries use gold for production purposes.
- Versatile metal: Gold is available in many useful forms making it a versatile investment. It is popularly used as jewellery and other gift items and held in the form of coins, bars or bullion. It is also available in edible form or woven into fabrics. Besides all this, paperless gold instruments are now being used to represent physical gold.
- Gold reserves: Gold is maintained as reserves to back paper currencies by many countries. These paper currencies attain their values based on the value of the gold reserves that back them.
- Limited supply: The amount of gold that can be mined and produced in the world is limited. Due to this, gold attains more value as an irreplaceable asset.
- Tradition: Gold has traditionally been used for financial transactions. This has passed down through the ages and prevails even today.
Indian gold reserves
This is the amount of gold held by India’s Central Bank. Referred to as store value, it is against these reserves that currency is printed and circulated in the economy. Besides providing value to currency, these reserves act as security for amounts due to depositors or trading partners.
Indians primarily invest in gold as a means to counter inflation. While the price of gold may fluctuate over time, the value of this metal remains relatively stable, especially in the long-run. Returns on gold are generally higher in the long-run as compared to other asset classes. Real estate and equity markets have proven to be the exceptions but for most Indian investors, gold still forms a huge part of their investment portfolios.
Traditionally, investment in gold has been in the form of jewelry, gold bars or gold coins. As financial markets developed over the years, new investment avenues have opened up. Gold is now increasingly being invested in through Gold ETFs (Exchange Traded Funds) or through mutual funds which invest in gold or through stocks of companies that are in the business of gold/gold-related activities. Gold is also traded as a commodity on commodity exchanges.
Investments in gold commodities, ETFs, funds and stocks can be done online adding another dimension to gold investments in India.
Gold is traded through spot contracts or derivative contracts i.e. investors can trade in gold without possessing gold in its physical form.
- Gold spot contracts are whereby gold is bought and immediately delivered (i.e. sold and delivered right away).
- Gold futures contracts are whereby gold is bought and sold at a later date as per the contract. Unlike most other commodities, gold futures are traded at spot prices and not at prices influenced by demand and supply.
Gold is traded as a commodity on three major commodity exchanges in India:
- Multi Commodity Exchange (MCX)
- National Commodity & Derivatives Exchange (NCDEX)
- National Spot Exchange (NSEL)
MCX is India’s leading commodities exchange and a leading exchange to trade in gold. Contracts traded here offer great liquidity and offer investors the option of contracts in four different sizes as outlined below with their other key features:
- Ticker GOLD
- Trades during 6 months of the year i.e. February, April, June, August, October, December (Monday - Saturday)
- 1 contract = 1 kg of gold
- Initial margin: 4%
- Daily price limit: 3%
- Upper limit on positions: Up to 2.5 MT for individual clients; higher of 12.5 MT or 15% of open position on market for all clients together through a member
- Quality: 995 purity, 999 purity
- Gold Mini:
- Ticker GOLDM
- Trades in all 12 months i.e. January to December (Monday - Saturday)
- 1 contract = 100 grams of gold
- Initial margin: 4%
- Limits on positions: Up to 2.5 MT for individual clients; higher of 12.5 MT or 15% of open position on market for all clients together through a member
- Quality: 995 purity, 999 purity
- Gold Guinea:
- Ticker GOLDGuinea
- Trades in all 12 months i.e. January to December
- 1 contract = 8 grams of gold
- Limits on positions: Up to 2 MT or up to 250,000 contracts at one time
- Gold Petal:
- Trades in months as specified by the exchange
- 1 contract = 1 gram of gold
- Limits on positions: Up to 2,000,000 contracts at one time
The best decisions are informed decisions and a decision to buy gold should also be a well-informed one. Especially given the present-day scenario where one has diverse investment options, the decision to invest in gold is not just ‘at what price’ but also when, how and how much. Gold prices, gold price trends and movements, investment channels and returns on investing in gold are all important factors to consider.
Information is now available online from a number of sources both authoritative as well as informational. This facilitates decision making to save time and effort. Besides the latest gold rates and factors that affect gold prices, information is available on gold production, trades, different forms of gold (physical and paperless), leading jewellers etc. Experts also publish their views on gold as an asset as well their outlook on the performance of gold.
|To convert from||To||Multiply by|
|Troy ounces||Penny weights||20|
|Troy ounces||Avoirdupois ounces||1.09714|
|Avoirdupois ounces||Troy ounces||0.911458|
|Short tonne||Metric tonne||0.9072|
Gold is one precious metal which has managed to retain its shine over the years, creating a niche space for itself in the investment world. Being a natural resource, there is a constant mismatch between the demand and supply, making gold an extremely precious commodity, with people viewing it as a safe and reliable investment option. India is one of the largest consumers of gold in the world, with estimates indicating that the residents own over 20,000 tonnes of this precious metal. While our love for gold is witnessed across the length and breadth of India, there is more to gold than just its utility, aspects which most of us are unaware about.
Gold as a commodity isn’t the easiest one to comprehend, with certain nuances having a great impact on it. Taking time to learn about them can help you get the best out of your investment, making it truly shine.
What is the current gold price in India ?
Gold rates change on a daily basis, with a number of factors impacting their price in a particular place on a given day. Demand and supply, global market conditions and currency fluctuations are some of the most critical factors which go into determining the rate of gold in a country, with prices changing every day. Gold rates in India have been following international trends, with a rise of close to 16% witnessed in the last four months. Purity also plays a key role in determining gold rates, with 24 karat gold costing more than 22 or 18 karat gold. Individuals who want to invest in gold would need to pay around Rs 2,962 per gram for 24 karat gold and Rs 2,766 for a gram of 22 karat gold (as of 25/04/2016).
What are the different avenues to invest in gold ?
Gone are the days when the only mode to invest in gold was to purchase it physically. Today, there are multiple avenues through which one can buy gold, with the popular ones mentioned below.
Gold mutual funds – Gold mutual funds are offered by a number of organisations, offering ease of investment through SIPs.
Gold ETFs – Gold Exchange Traded Funds permit trading of gold in units (by weight), with the investment viewed as debt mutual funds by tax authorities.
Gold futures – Gold futures are popular among certain investors, with the MCX and NCDEX offering avenues to invest in gold through derivatives.
E-gold – E-gold is a new option to invest in gold, offering ease and flexibility to investors.
Physical gold - Physical purchase of gold in the form of coins, jewellery, bars, etc. continues to account for a major portion of investment, with the new modes expected to gain more acceptance with time.
How many grams of gold in one tola?
Gold is purchased by weight, with every gram costing a decent amount of money. India is home to over 1.2 billion people, each one unique and having different modes of communication, including units of weight. While there are internationally accepted conventions when it comes to weight, certain regions have their own traditional units, with the Tola being one such popular unit.
1 Tola roughly translates to around 11.6 grams, with 1 kg of gold corresponding to 85.7 Tolas (approximately). This unit is still used in a number of towns and cities, with 1 Tola gold costing Rs 30,887 (as of April 25, 2016).
How to buy gold?
Buying gold isn’t very hard, given the multiple avenues available, but there are a few key points one should keep in mind before spending that hard earned money.
Research – Gold rates change on a daily basis and it is imperative that one does research before buying gold. Observing trends and staying abreast of changes can ensure that you get a good deal on the investment, reducing the chances of being cheated.
Gold selection – Gold can be purchased in different forms, with each one offering unique advantages. Choose an investment avenue which matches your needs.
Certification – There are numerous occasions wherein people have been duped into buying gold of inferior purity, purely on account of blind faith. Ensure that the jeweller or source you intend to buy from has a good record, and insist on purity certification.
Online purchase – Individuals who wish to buy gold online need to ensure that the source they choose is trusted, for a number of sellers on the internet can be fake.
How to sell gold ?
Gold is one investment which is always in demand, making it a liquid asset. Selling gold isn’t hard, with most jewellers and pawn shops willing to buy gold at market rates. Individuals who wish to sell gold need to ensure that they know current gold rates, for buyers may choose to haggle or negotiate, and failing to know present prices could result in selling gold at lower rates.
Also, gold coins and bars attract better rates than jewellery and are easier to sell. Individuals who do not wish to sell gold can choose to avail gold loans against it, with a number of banks and private lenders offering loans keeping gold as collateral.
What are the different purity levels in gold?
Gold is often purchased by weight and purity, with the purity measured in a unit called Karat. Gold is available in different purities, with the popular ones being 24 karat, 22 karat and 18 karat. While 24 karat gold is used extensively as an investment, 22 and 18 karat gold can be used to make jewellery and ornaments.
22 karat gold is a mixture of gold and alloys, in the ratio 11:1. This essentially means that 1 gram of 22 karat gold has around 91.5% pure gold, with other metals making up the remaining portion. These impurities are added to pure gold to make it more malleable and ductile, thereby making it perfect for jewellery.
Similarly, 18 karat gold is a mixture of gold and metals in the ratio 3:1, i.e. 75% pure gold and 25% metals. This is typically cheaper than 22 and 24 karat gold on account of impurities. 18 karat gold typically has a dull colour, making it easily recognisable.
Other gold options include 14 karat gold (which has 58% gold), 10 karat gold (with 42% gold) and 6 karat gold (with 25% gold).
What is 24 karat gold?
24 karat gold is the purest form of gold which can be purchased, having no impurities. This purity makes it ideal for investments, with most investors choosing to purchase 24 karat gold. The only drawback of this purity is that 24 karat gold cannot be used to make jewellery or ornaments, limiting their use to gold coins or bars.
How to buy gold coins in India?
Gold coins are extremely popular in the country and are available in different weights, ensuring that investors can buy gold which suits their budget. Gold coins can be purchased from banks, jewellers, post offices or online stores, with the popular ones being in the 1g to 10g weight bracket. A number of jewellers and online stores sell coins with the imprint of Gods or Goddesses, charging higher for such coins.
One can walk into any bank or jewellery store and choose to buy a coin, albeit a PAN might be required if the cost exceeds Rs 50,000. Most jewellers and banks offer a purity certificate with the coin, which could hike the cost of a coin. Gold coins can be purchased by purity as well, with the popular options being 22 and 24 karat.
One should remember to keep certain basic points like market rate, dealer reputation, certification, etc. before buying gold coins.
How to buy gold bars?
Gold bars are typically reserved for serious investors, people who have sufficient funds to invest in them. These bars can be purchased in different weights, typically ranging between 500g and 1kg. Banks and big jewellers sell gold bars, although one can also purchase them online. One must remember to check the purity and prevailing market rates before investing in gold bars. A Pan is required if one is purchasing gold bars worth over Rs 50,000.
Why gold price is increasing in India?
Gold rates in the country change on a regular basis, with a number of factors impacting rates. A close look at recent trends could highlight the reason for such changes. Some of the most common factors impacting gold rates in India are mentioned below.
Demand and supply – Gold rates increase when the demand exceeds supply. Gold, being a natural resource is available in limited quantities, and each time the supply reduces there is a spurt in gold rates.
International relations – International trends have a deep impact on gold rates in India, primarily due to the fact that India depends on imports to meet local demand. Any changes in international relations could translate into a change in local gold rates.
US dollar – The US dollar plays a key role in determining international gold rates. A strong dollar results in poor gold performance and vice versa, resulting in costlier gold each time the dollar underperforms.
Market conditions – Gold is inversely proportional to market performance, with prices going up each time there is pressure on markets.
Government taxes and duties – The government imposes taxes and duties on a number of commodities, including gold. Any increase in these taxes automatically pushes gold rates, pinching the pocket of buyers.
There has been a recent increase in gold rates due to improved performance on the international front. The US Federal Policy rate change had a huge impact on prices, helping them pick up after a poor performance last year. One could see a further hike in rates in the coming weeks, as the US Central Bank is set to change its rates, which are likely to have a direct impact on gold.
|Also Know: Silver Rate in India|
Also check Today's Gold Rate in the most popular Indian cities
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Global Tensions Increases Gold Rates
Global political situations have resulted in gold prices increasing consistently. It is assumed that the prices will increase further. US bombed Afghanistan and Syria and its relations with Russia worsened recently. US-North Korea relations have also touched a new low after the US President sent an aircraft carrier group in the region as a warning against testing of nuclear weapons. On April 13, Gold futures for the month of June rose to $1,285.9 per oz. The prices of other metals have also increased. In India, MCX spot gold rates touched Rs.29,313 per 10 grams on April 13. At a global level, gold is purchased mainly by the central banks.
17th April 2017
Gold rates decrease due to comments made by Trump on Fed rates
The dollar rebounded due to comments made by President Donald Trump. So the gold prices fell from the 5-month high. According to Trump, greenback was very strong and he would prefer Federal Reserve keeping the rates of interest low.
Stock markets remained under pressure due to geopolitical tensions in the Middle East and North Korea. The yellow metal witnessed an increase of about 2.6% last week. The spot gold went up by 0.06% and stood at $1,286.84 per ounce. If the tensions cool off, the gold prices can fall. The Fed is making their policies tighter which will makes gold rates fall further. These were mentioned by Capital Economics in one of their notes. The wider markets faced light trading volumes before the Easter holidays.
15th April 2017
Rate of gold increased as political tension increased safe haven purchase
Rate of gold increased on Tuesday due to increasing political tensions over the Middle East and North Korea buoyed safe-haven purchase for the metal. The rate of spot gold was higher by 0.2% at $1,256.36 an ounce whereas U.S. gold futures increased by 0.3% to $1,257.90. Increased tension in the Middle East and Korean Peninsula after the U.S. strikes on Syria along with the French Presidential election have resulted in investors becoming nervous.
Gold would retain a certain amount of support during times such as these. Prime Minister of Great Britain Theresa May spoke to U.S. President Donald Trump and hoped to persuade Russia to sever ties with Syrian President Bashar-al-Assad. The U.S. Federal Reserve hopes to raise rate of interest gradually so as to maintain healthy growth without hindering the economy.
11th April 2017
Gold prices steadily climb
Gold price in india saw a rise in its second straight session, the precious metal rose by Rs.20 to close at Rs.29.270 per 10 grams. Gold saw sustained buying from local jewellers, even as globally gold saw a weakened trend. A reduced offtake by industrial users and coin makers saw silver drop by Rs.250 to close at Rs.42,400. The spot gold market saw an increase in buying by local jewellers due to the ongoing Navratra season. Globally, gold saw a decline of 0.31% to Rs.1,245.30 per ounce and silver saw a decline of 0.49% to Rs.840.47 an ounce. India saw 99.9% purity gold rise by Rs.20 to Rs.29,270 per 10 grams. The sovereign remained stable at Rs.24,400 per eight gram piece. Silver coins were sold at Rs.72,000 per 100 pieces and bought at Rs.71,000 per 100 pieces.
3rd April 2017
Rate of gold rises by Rs.200 to trade at Rs.29,550 for 10 grams
Price of gold increased by Rs.200 to trade at Rs.29,550 for 10 grams at the bullion market due to higher purchase of this precious metal by local jewellers due to ‘Navaratas’ even as the rate of gold fell abroad. Rate of silver also increased by Rs.50 to trade at Rs.42,250 per kg due to higher offtake by coin makers and industrial units.
Due to ongoing festive season in the country, there was an increase in the purchase of gold by jewellers and the weak demand for this metal reduced the appeal of gold as a safe haven investment option. Globally, the rate of gold fell by 0.10% to USD 1,250 per ounce in Singapore.
29th March 2017
Gold Futures Increase by Rs.97 on Global Cues
Gold prices increased by Rs.97 from Rs.28,937 to Rs.29,034 per 10 grams owing to widened positions by speculators and a firming global trend. Gold for delivery in the month of June at the Multi Commodity Exchange was trading higher by 0.34% (Rs.97). In April, gold for delivery was trading higher by 0.32% (Rs.92) at Rs.28,885 per 10 grams. According to market analysts, speculators widened their positions as global trends firmed and the dollar grew weaker against major foreign currencies following President Trump’s failure to implement healthcare reforms, thereby influencing gold futures in India.
28th March 2017
Gold falls below Rs.30,000, silver reduces to Rs.1,350 per kg
Gold prices reduced to trade at below the Rs.30,000 mark by falling Rs.275 to touch Rs.29,725 per 10 grams at the bullion market due to reduction in demand from local jewellers and weak global trend. Silver also reduced by Rs.1,350 to trade at Rs.42,700 per kg due to reduced offtake by coin makers and industrial units. According to traders, a weak trend abroad and the dollar’s strength against currencies’ basket on rising hopes of a rate hike by US Fed, reduced the appeal of these metals.
Across global markets, gold reduced by 0.21% to trade at $1,231.40 per ounce in Singapore. Besides, a reduction in demand from local jewellers and retailers at present levels also weighed on the prices of these precious metals. In the national capital, gold of 99.5% and 99.9% purity reduced by Rs.275 each to trade at Rs.29,575 and Rs.29,275 per 10 grams, respectively. Sovereign was steady at Rs.24,500 for a piece of 8 grams. Silver ready fell by Rs.1,350 to trade at Rs.42,700 per kg and weekly-based delivery by Rs.1,160 to Rs.42,160 per kg.
13th March 2017
Gold, Silver Prices Low Due To Subdued Demand
Gold and silver traded low in early trading on March 7th, 2017 due to subdued demand. The Multi Commodity Exchange (MCX) price for gold was trading at Rs.28,935 per 10 grams on March 7th, 2017, down by 0.03%. Silver, meanwhile, traded at Rs.42,395 per kg on March 7th, 2017, down by 0.08% as the bourses opened.
Prices were low due to lower demand from jewellers and industry as the wedding season has reduced domestic demand for bullion, while the possibility of a U.S. Federal Reserve interest rate hike has kept markets hopeful, thereby reducing their appetite for gold and silver. SPDR Gold Trust GLD, the largest gold-backed exchange traded fund (ETF), reported losses due to reduced trading volumes, though iShares Silver Trust Fund SLV, the largest silver-backed ETF’s results were unchanged from the previous day.
9th March 2017
Gold and Silver price are stable following the Federal Reserve policy meeting
The minute after the Federal Reserve policy meeting, the gold and silver prices were at a stable rate with the gold prices eased by Rs.20 per gram. The meeting has raised speculation of interest rates going up while the US bond yields have lowered. The meeting has eased and reduced the price of gold and silver following the Federal Reserve policy meeting. The slackened precious metal demand from investors and stockiest have also contributed to the result of lowered prices of gold and silver.
27th February 2017
Sovereign Gold Bond 4th series to be Issued from Monday
The central government of India has decided to issue through RBI (Reserve Bank of India) the fourth series of Sovereign Gold Bond. Applications for the same will be accepted from February 27, 2017 to March 3, 2017. On March 17, 2017, the bonds will be issued and they will be denominated in grams of gold. The basic unit is 1 gram and the tenure is 8 years. These bonds will be sold through stock exchanges such as Bombay Stock Exchange and National Stock Exchange, SHCIL, assigned post offices and banks. From the 5th year, there will be an exit option. The interest will be fixed at 2.5% p.a., which will be paid on a semi-annual basis. The Sovereign Gold Bond Scheme was launched by the Prime Minister of India to reduce the demand for gold in the country.
23rd February 2017
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