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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.
Gold rate in India 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.
Also check : Silver Rate in India
Trend of Gold Rate in India for January 2020 (rates per gram of 24 karat gold)
| Parameters | Gold price (24 karat) |
| January 1 Rate | Rs.3,995 per gram |
| January 19 Rate | Rs.4,074 per gram |
| Highest Rate in January | Rs.4,211 per gram on 9 January |
| Lowest Rate in January | Rs.3,995 per gram on 1 January |
| Overall Performance | Decline |
January 2019- Week 1 (01 - 05):
- Gold prices opened the new decade in India at a price of Rs.3,995 per gram with no changes since 31 December 2019. The metal is supposedly set for its best year till date since 2010 based on multiple global factors.
- As gold prices have increased by over 19% in 2019, the metal increased to Rs.4,011 per gram on 2 January 2020 as the value of the dollar dipped in the global market. The dollar was under pressure at the beginning of the year as traders doubted its capability to grow when compared to trade in metal.
- On 4 January, the price of the metal decreased marginally to Rs.4,069 per gram. However, on 5 January, the metal increased yet again, closing the first week of the decade at Rs.4,111 per gram with an overall incline.
January 2019- Week 2(06 - 12):
- Gold prices in the country opened the second week of January at Rs.4,111 per gram. Compared to the previous week’s closing, there was no difference in prices. However, on 7 January, the price of the metal increased to Rs.4,179 per gram due to persisting tensions between the United States of America and Iran.
- There was a slight dip in prices on 8 January to Rs.4,121 per gram as investors awaited a reaction from the United States President, Donald Trump. As the President decided to ease the tensions, the price of the metal dipped further as the stock markets recovered. Gold prices hit the weekly high at Rs.4,211 per gram on 9 January.
- In the second half of the week, gold prices saw a major dip by Rs.105 per gram and were priced at Rs.4,106 per gram. As the tensions between Iran and the United States of America eased further, traders shifted back to the market for riskier bets. At the end of the week, gold was priced at Rs.4,095 per gram.
January 2019- Week 3(13 - 19):
- For the third week of January, gold prices were steady opening at Rs.4,095 per gram. In the global markets, the trend of the metal was at a low during renewed trade deal optimism between China and the United States of America. The interim Phase 1 deal between the two countries was signed on 15 January.
- On 14 January, the price of the metal dipped marginally at Rs.4,074 per gram as the investors eagerly waited for the trade deal to be signed and the tensions to ease. On 15 January, the metal recorded the lowest price of the week at Rs.4,037 per gram as the interim trade deal was signed between the two countries. A positive economic data in the United States of America also played a factor in the dip in gold prices.
- On 16 January, the price of gold increased marginally to Rs.4,074 per gram in the country amidst a falling trend overseas. This was majorly due to a steady demand of the metal even though investors were fueled with a higher risk appetite post the signing of the trade deal. At the end of the week, gold prices closed the week at Rs.4,074 per gram.
Trend of Gold Rate in India for December 2019 (rates per gram of 24 karat gold)
| Parameters | Gold price (24 karat) |
| December 1 Rate | Rs.3,906 per gram |
| December 29 Rate | Rs.3,901 per gram |
| Highest Rate in December | Rs.3,927 per gram on 5 December |
| Lowest Rate in December | Rs.3,848 per gram on 14 December |
| Overall Performance | Decline |
December 2019- Week 1 (1 – 8):
- In India, gold prices stood at Rs.3,906. witnessed a declining trend in the first week of December. The rates opened the week at Rs.3,906 per gram.
- The rates declined in the first four day of the week as there were flipping reports on the US – China trade deal. However, with the US president stating that the talks were going in the right direction, the rates jumped to Rs.3,927 per gram on 5 December.
- Gold closed the week at Rs.3,875 per gram in the national capital. This was the lowest recorded price for the fuel in the first week.
December 2019- Week 2 (9 – 15):
- Gold started the second week of December at Rs.3,875 per gram. The rates didn’t see any change in the prices when compared to the previous week’s closing price.
- The rates dropped in the next couple days before remaining stagnant for a day as investors awaited clarity on whether a next round of US tariffs on Chinese imports would take effect.
- The prices were at its highest for the week on December 13 as the safe-haven appeal was boosted due to political uncertainties in the world’s biggest economy. The yellow metal closed the week at Rs.3,885 per gram with the overall performance trending downwards.
December 2019- Week 3 (16 – 22):
- In the country, gold opened the third week of the month at Rs.3,885 per gram. The price of the metal was holding steady through the previous week due to various global factors and as investors awaited clarity on the trade deal between the United States of America and China.
- After decreasing by Rs.10 on 17 December to Rs.3,875 per gram, the metal’s price steadied in the market. On 19 December, the price of gold increased to Rs.3,896 per gram as the Senate House voted to impeach United States President, Donald Trump on obstruction charges and abuse of power.
- By the end of the week, gold prices held steady decreasing marginally to Rs.3,890 per gram and then steadying to Rs.3,896 per gram on 22 December. The metal closed the week at an increased price of Rs.3,901 per gram due to persistent doubts on the U.S.-China deal.
December 2019- Week 4 (23 - 29):
- In the country, gold opened the third week of the month at Rs.3,885 per gram. The price of the metal was holding steady through the previous week due to various global factors and as investors awaited clarity on the trade deal between the United States of America and China.
- After decreasing by Rs.10 on 17 December to Rs.3,875 per gram, the metal’s price steadied in the market. On 19 December, the price of gold increased to Rs.3,896 per gram as the Senate House voted to impeach United States President, Donald Trump on obstruction charges and abuse of power.
- By the end of the week, gold prices held steady decreasing marginally to Rs.3,890 per gram and then steadying to Rs.3,896 per gram on 22 December. The metal closed the week at an increased price of Rs.3,901 per gram due to persistent doubts on the U.S.-China deal.
Trend of Gold Rate in India for November 2019 (rates per gram of 24 karat gold)
| Parameters | Gold price (24 karat) |
| November 1 Rate | Rs.3,892 per gram |
| November 30 Rate | Rs.3,828 per gram |
| Highest Rate in November | Rs.3,892 per gram on 1 November |
| Lowest Rate in November | Rs.3,803 per gram on 29 November |
| Overall Performance | Decline |
November 2019- Week 1 (01-03):
- In November, gold rate in India opened at Rs.3,892 per gram due to trade uncertainties and was set for a rise in prices for the second continuous week. Apart from this, investors further speculated for a further cut in interest rates by the Federal Reserve.
- However, due to strong Chinese factory data, there were renewed hopes on profit as well as the trade talks. The applications for unemployment benefits were on the rise in the United States of America. Banking on strong data, the gold price in India marginally decreased to Rs.3,890 per gram on 2 November.
- The price of gold in India was steady on 3 November and ended the first week of the month at the same price of Rs.3,890 per gram based on strong Chinese data and positive trend of U.S. jobs.
November 2019- Week 2 (04-08):
- Gold prices in the country saw a declining trend in the second week of the month. Opening at Rs.3,892 per gram, at the opening of the second week, decreased to Rs.3,886 per gram due to strong job data in the United States of America.
- After further decreasing to Rs.3,879 per gram on 5 November, due to renewed optimism in the trade deal between China and the United States of America, gold prices decreased further.
- On 6 November, the price of the metal decreased to Rs.3,840 per gram and increased marginally to Rs.3,860 per gram on 7 November as stocks were paused due to trade uncertainty. The metal closed at a one-month low of Rs.3,817 per gram.
November 2019- Week 3 (09-17):
- In India, the price of gold saw a fluctuating trend in the third week of the month. Opening the week at Rs.3,812 per gram, the price of the metal dipped to Rs.3,806 per gram on 11 November due to the positive developments in the trade talks between the United States of America and China.
- On 12 November, gold prices touched a 3-month low at Rs.3,803 per gram in the country due to an upbeat risk appetite from investors as they shifted to the stock market in hopes of positive trade talk developments.
- Gold prices recovered marginally on 13 November at Rs.3,816 per gram as investors awaited the speech by President Donald Trump. As there were no signs of the trade deal being signed, the investors shifted to the bullion as a safe-haven asset. The price of the metal increased and closed the week at Rs.3,827 per gram.
November 2019- Week 4 (18 - 24):
- Gold prices showed a negative trend in the fourth week of the month due to renewed optimism in the trade deal between the United States of America and China. On 18 November, the price of the metal opened the week at Rs.3,818 per gram.
- However, on 19 November, the price of the metal increased to Rs.3,841 per gram as an impeachment inquiry against the United States President Donald Trump hurt the ongoing trade talks between the two economic superpowers.
- On 20 November, the price of the metal was holding steady with a marginal decrease at Rs.3,837 per gram as United States President threatened fresh tariffs on Beijing and as the United States Senate supported the ongoing protests in Hong Kong. Overall, the metal saw a decline and closed the week at Rs.3,821 per gram.
November 2019- Week 5 (25 - 30):
- Gold prices in the country saw a lot of fluctuations in the fifth and final week of November after opening the week at Rs.3,806 per gram. Compared to the previous day’s closing price, the rates dipped by Rs.15 for every gram.
- The rates of the yellow metal fell further over the week as traders decided to wait for further developments regarding the trade deal between the United States and China. Every gram of the 24-carat gold was traded for Rs.3,803 on 29 November. This was the lowest recorded price for the precious metal in the month.
- In India, gold prices closed the week at Rs.3,828 per gram as no clear indication was provided by either country regarding the trade deal. Gold’s overall performance was trending downwards due to such reasons.
Trend of Gold Rate in India for October 2019 (rates per gram of 24 karat gold)
| Parameters | Gold price (24 karat) |
| Rate on 1st October | Rs.3,722 per gram |
| Rate on 31st October | Rs.3,857 per gram |
| Highest Rate in October | Rs.3,872 per gram on 26 October and 27 October |
| Lowest Rate in October | Rs.3,722 per gram on 1 October |
| Overall Performance | Incline |
October 2019- Week 1 (1-6):
- After opening at Rs.3,722 per gram, gold rate in India surged during the week, bolstered by festive demand and a rise in overseas demand which raised prices.
- The gold price in India rose to Rs.3,818 per gram on 3 October as fresh trade tensions and tariffs on EU goods saw equities tumble and increased demand for bullion.
- Gold Prices continued to climb for the rest of the week, as weak U.S. jobs data and rising domestic demand buoyed sales, with the metal ending the week at Rs.3,830 per gram.
October 2019- Week 2 (7-13):
- Gold opened the month of October at Rs.3,722 per gram and saw a gradual positive trend in prices due to a heavy local demand due to the festive season in the country along with an increased demand overseas.
- The gold rate in India was at Rs.3,848 per gram on 9 October and remained stagnant on 10 October as well due to Turkey launched a military operation in Syria due to enhanced tensions in the Middle East.
- On 13 October, the price of gold saw a marginal decrease to be priced at Rs.3,826 per gram due to easing global demand as well as ease in tensions in the trade war between the United States of America and China.
October 2019- Week 3 (14-20):
- After closing the previous week at Rs.3,826 per gram, the price of gold opened the 3rd week of the month with a low at Rs.3,822 per gram due to renewed optimism around the trade talks.
- However, on 15 October, the price of the metal increased to Rs.3,856 per gram, hitting its weekly high ahead of the Brexit talks.
- As the week went proceeded, the price of gold steadied and eventually decreased marginally due to ease in Brexit anxiety and renewed trade talk optimism.
October 2019- Week 4 (21-27):
- Gold prices in India opened week 4 of October at Rs.3,845 per gram on 21 October and quickly dipped to Rs.2,829 per gram on 22 October due to renewed cues on trade talks and the Brexit deal between the European Union and Great Britain.
- After increasing marginally on 23 October being priced at Rs.3,846 per gram, the precious metal held steady on the following day as well mainly due to uncertainties on the Brexit deal which made investors shift to the bullion.
- However, on 25 October, the yellow metal nearly reached its 2-week high at Rs.3,871 per gram as due to weak economic data indicated another rate cut by the United States Federal Reserve. Apart from this, due to a rise in local demand ahead of the festival of Diwali, prices of gold rose.
October 2019- Week 5 (28-31):
- In the last week of October, the price of gold was Rs.3,869 per gram recording a marginal fall in prices after closing the previous session at Rs.3,872 per gram. This was majorly due to an ease in market tensions as the trade talks between China and the United States of America eased.
- The price of the precious metal further decreased on 29 October to Rs.3,836 per gram as trade talks hopes resulted in equities showing positive trends. However, gold prices increased marginally to Rs.3,847 per gram on 30 October due to the possible delay in trade talks resulting in increased focus on rate cuts by the United States Federal Reserve.
- Gold prices showed positive signs on 31 October rising to Rs.3,857 per gram as the United States Federal Reserve cut the interest rates as expected by the investors due to weak economic data. The precious metal closed the week and month at the same price.
Trend of Gold Rate in India for September 2019 (rates per gram of 24 karat gold)
| Parameters | Gold price (24 karat) |
| September 1 Rate | Rs.3,876 per gram |
| September 30 Rate | Rs.3,799 per gram |
| Highest Rate in September | Rs.3,953 per gram on 4 September |
| Lowest Rate in September | Rs.3,758 per gram on 19 September |
| Overall Performance | Decline |
| Percentage Change | -1.9% |
September 2019- Week 1 (1-8):
- After a period of steady growth, gold price in India opened the week at Rs.3,876 per gram and rose on a weak rupee and strong overseas cues.
- Gold price in India climbed to Rs.3,953 per gram on 4 September as weak U.S. jobs data renewed economic slowdown fears, though a rise in equities resulted in the metal trading lower at Rs.3,885 per gram on 6 September.
- A possible economic stimulus bolstered equities as bullion fell sharply, with the metal ending the week at Rs.3,855 per gram on 8 September.
September 2019- Week 2 (9-15):
- Gold rate in India continued their downward slide this week, opening at Rs.3,842 per gram on reduced retail demand and declining investor interest.
- A rise in risk appetite and a rising dollar rate dented bullion appeal as the gold dropped to Rs.3,799 per gram on 12 September, though jeweller demand remained steady ahead of the festive season.
- A resolution to the U.S.-China trade war bolstered equities, which capped gold gains as the gold price slid to Rs.3,763 per gram on 15 September.
September 2019- Week 3 (16-22):
- Gold price in India continued their downward slide this week, opening at Rs.3,807 per gram on reduced retail demand and declining investor interest.
- A rise in risk appetite and a rising dollar rate dented bullion appeal as the gold rate in India dropped to Rs.3,799 per gram on 18 September, though jeweller demand remained steady ahead of the festive season.
- A resolution to the U.S.-China trade war bolstered equities, which capped gold gains as the metal slid to Rs.3,794 per gram on 22 September.
September 2019- Week 4 (23-30):
- Weak overseas offtake impacted gold price in India, with the metal trading at Rs.3,791 per gram on 23 September on a falling rupee and lacklustre jeweller demand.
- Gold price in India fell to Rs.3,777 per gram on 26 September as investors booked profits amidst a steady recovery in the dollar rate, as bullion lost favour.
- There was a marginal recovery over the weekend as retail sales increased, resulting in gold price ending the month at Rs.3,799 per gram to record a 1.9% decline in price.
Trend of Gold Rate in India for August 2019 (rates per gram of 24 karat gold)
| Parameters | Gold price (24 karat) |
| August 1 Rate | Rs.3,481 per gram |
| August 31 Rate | Rs.3,876 per gram |
| Highest Rate in August | Rs.3,913 per gram on 29 August |
| Lowest Rate in August | Rs.3,481 per gram on 1 August |
| Overall Performance | Incline |
| Percentage Change | 11.34% |
August 2019- Week 1 (1-11):
- Gold rate in India were on a steady rise after opening the month at Rs.3,481 per gram as renewed economic uncertainty increased its safe-haven appeal.
- Gold Prices jumped to Rs.3,563 per gram on 5 August as the U.S. indicated a rise in tariffs on Chinese goods led to markets sinking and the dollar rate falling.
- The gold price in India climbed to Rs.3,750 per gram on 8 August as central banks slashed interest rates, ending the week higher at Rs.3,761 per gram on 11 August.
August 2019- Week 2 (12-18):
- Gold price in India opened at Rs.3,761 per gram before surging to Rs.3,793 per gram on 13 August as fears over renewed trade tensions.
- A brief dip in gold rate to Rs.3,755 per gram on 14 August after the U.S.’ trade concessions to China bolstered equities, but recession fears boosted bullion demand as gold surged to Rs.3,799 per gram on 15 August.
- Equities rebounded after hints of a stimulus from major central banks bolstered currencies, with gold price falling to Rs.3,787 per gram on 18 August.
August 2019- Week 3 (19-25):
- Gold rate in India opened lower at Rs.3,766 per gram on 19 August as a recovery in equity markets resulted in a dip in bullion demand.
- Gold price in India climbed to Rs.3,781 per gram on 21 August as renewed fears over recession and geopolitical crises rattled currency markets, increasing demand for safe-haven assets.
- The Fed meeting dampened some bullion demand before the metal rallied and ended the week at Rs.3,864 per gram on 25 August.
August 2019- Week 4 (26-31):
- Gold price in India continued to climb on steady local and overseas cues, opening the week higher at Rs.3,904 per gram before slipping to Rs.3,875 per gram on 27 August on profit booking.
- The possibility of Sino-U.S. talks bolstered equities and raised the dollar, though monetary stimulus plans and slowing growth saw prices soar to Rs.3,913 per gram on 29 August.
- Renewed indications of a resolution to the trade dispute saw bullion demand fall as gold price in India ended the month at Rs.3,876 per gram.
Gold Rate in the Most Popular Indian Cities
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 rate in India. 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.
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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:
- Gold
- 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
Gold Information
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.
Gold Weight Conversion Table
| To convert from | To | Multiply by |
| Tonnes | Troy ounces | 32150.7 |
| Troy ounces | Grains | 480 |
| Kilograms | Tolas | 85.755 |
| Kilograms | Bahts | 68.41 |
| Kilograms | Troy ounces | 32.1507 |
| Troy ounces | Grams | 31.1035 |
| Million ounces | Tonnes | 31.1035 |
| Kilograms | Taels | 26.7172 |
| Troy ounces | Penny weights | 20 |
| Troy ounces | Avoirdupois ounces | 1.09714 |
| Avoirdupois ounces | Troy ounces | 0.911458 |
| Short tonne | Metric tonne | 0.9072 |
| Grams | Troy ounces | 0.0321507 |
Get Here:Historical gold rate trend in India
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.
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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.
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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.
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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.
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Market conditions – Gold is inversely proportional to market performance, with prices going up each time there is pressure on markets.
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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.
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).
Which is the best investment option: Physical Gold, Gold ETFs, or Sovereign Gold Bonds?
In this section, we talk about all three investment options pertaining to gold and determine which of these is better.
| Factors | Physical Gold | Gold ETFs | Sovereign Gold Bonds |
|---|---|---|---|
| Liquidity | Offers high liquidatable. It can be invested or exited any time an individual wants to. | ETFs also offers highly liquidity option. It can be traded on the stock exchange and can be liquidated during a trading session. However, the cost of selling is quite low compared to physical gold. | Can be bought from local banks and trade exchanges. Again, the cost of buying and selling is quite low compared to physical gold. |
| Safety | Is highly susceptible to thefts and burglary. | Very safe as it is stored in a dematerialised form in a DEMAT account. | Again, SGBs are kept in a DEMAT account and offers optimum safety. |
| Loan facility | Easily available. | Loans can be availed against gold ETFs. | Not available |
| Investment flexibility | Can be invested in a short time frame. | Can be bought in shorter quantities and requires less maintenance. | Can be bought in shorter quantities and requires less maintenance. |
| Tax Liability | All three avenues are taxed in a similar manner. To start off, any investment that is kept for more than three years is considered a long term holding and is eligible for Long Term Capital Gains (LTCG) tax, which currently remains at 20% after indexation. If they are held for less than 3 years, they are considered a short term holding and is taxed based on the individual’s tax slab Note that, Sovereign Gold Bonds offers one advantage on the tax front, wherein the gains are tax exempt if the investment is redeemed after the maturity period. | ||
Taxes on Gold in India
Gold as a commodity attracts taxation in India, and depending on what it is used for, the taxes levied on the resource differ.
Tax on Purchase of Gold
Most gold in India is imported, with the result that gold is subject to customs duty. The customs duty payable on gold stands at 10% of the total value of the gold. In addition, processing charges associated with purchase would be taxed at 5%.
The sale of gold in India brings it under the purview of GST (Goods and Services Tax) that was introduced in 2017. The GST on gold was set at 3%. As a result, the total tax payable on gold stands at 14% at present.
Income Tax on Gold
Any profit made from the sale of gold attracts income tax and both individuals as well as industry/jewellers are required to pay income tax in such a case.
The profit derived from the sale of gold falls under ‘Capital Gains Tax’ and details of tax liabilities and possible exemptions are mentioned below:
- Gold or gold jewellery bought and sold within a period of 3 years (36 months) is considered a short-term capital asset and would be taxed at the applicable rate (this is subject to change as announced by the government).
- Gold or gold jewellery bought and sold after a period of 3 years (36 months) is considered a long-term capital asset. Whether the gold was bought or given as a gift or received in the form of an inheritance, it would come under the long-term capital asset category. The taxes and other surcharges would be calculated accordingly.
- Gold received as a gift is exempt from tax if the value of the gold is less than Rs.50,000.
In the event of gold being sold and no profit being made from the sale, there is no tax since it is considered a ‘capital loss’ and can be listed at the time of filing income tax returns.
Uses of gold
Gold, as a metal, is used for a number of things apart from jewellery and bullion. In this section, we will list out the various industries that make use of the yellow metal.
- Glass making
Gold is used to a significant extent during a glass making process. Here are the three most popular uses.
- Of all the ways the metal is used, the most basic one is as a pigment. Gold is used in the annealing process to arrive at a rich ruby gloss. Annealing, to begin with, is a process involved in glass manufacturing, wherein it is heated to its ductile best and allowed to cool down slowly so as to harden it.
- Gold is also used in specialty glass making which are often used in climate-controlled buildings. A tiny amount of gold is added to a glass surface to help refract solar radiation away from a building, which in turn keeps the a building cool.
- It is used in the making of visors for astronaut helmets. Ideally, a thin film of gold is used to line the layer of helmets to keep intense solar radiation, which would otherwise harm the astronaut’s eyes.
- Electronics
Gold is used vastly in the electronics industry, thanks to its highly conductive properties. For starters, gold is used in every sophisticated electronic device, right from GPS units, cell phones, calculators, digital assistant units, and most of all television sets. The one downside to this, however, is the sheer wastage of the metal. This is because cell phones and consumer electronic products are manufactured in the millions and have a short shelf life. And due to the fact that there’s no proper recycling process in place, a considerable amount of gold is lost when the electronic products are dumped.
- Aerospace:
Aerospace vehicles are nothing like earth vehicles, and the most important distinction is that they cannot be serviced only it takes off from earth. This is why they need to be built with highly dependable materials. Here in comes gold. Thanks to its conductivity and connecting properties, the metal is used in circuitry. Besides this, most parts of a space vehicle is fitted with a gold-coated polyester film which helps keep infrared radiation out and keep the temperature inside the vehicle stable.
- Others
Apart from the uses mentioned above, gold is used in a variety of other domains, including but not limited to dentistry, awards, symbols, and statues.
FAQs About Gold
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.
When is the right time to buy gold in India?Although, there isn’t such a thing called the right time to buy gold, there are periods where demand is usually low and so will be the rates. So, in order to make the most of your investment, try to invest in the metal during the off-season i.e., when no major festivals aren’t around. This is because major festivals bring about an influx of buyers which will push gold prices higher.
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.
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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.
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Gold selection – Gold can be purchased in different forms, with each one offering unique advantages. Choose an investment avenue which matches your needs.
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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.
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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.
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 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.
How US treasury bond yields affect gold prices in India today?Typically, US treasury yields and gold prices have an inversely proportional relationship, which is in turn connected to the Federal Reserve interest rate changes. For instance, if the Fed Reserve increases the interest rates, yields on savings accounts and bonds increase. This in turn makes gold a much weaker proposition for investors and causes gold rates to plummet. According to historic data from the last ten years, gold rates have thrived massively when 10-year yields have been at their lowest points. Note that, only the yields affect gold rates more when compared to 2-year and 5-year yields.
Is it worth investing in gold schemes offered by jewellers?For a vast majority of Indians, gold is a symbol of their stature in the societal hierarchy. Considering how expensive gold is getting each year and how most of the population can’t afford it, gold schemes are a boon in disguise. For starters, a prospective investors needs to pay a small amount on a monthly basis and you get the money’s worth in gold at the end of the tenure. Further, jewellers tend to knock off making charges altogether at times to make the deal more enticing.
Who discovered gold?Gold has been in use for millennia and the actual details of the person who discovered it is unknown. However, the earliest use of gold can be seen in the early civilisations ranging from the Greece, Egypt, and Rome among others, where gold featured heavily both in trade and commerce.
