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Know about 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.
Gold Rate in India for Last 5 Days (1g)
|Date||1 gram Standard Gold (22 K)||1 gram Pure Gold (24 K)|
|04 Mar 2021||₹ 4,461||₹ 4,866|
|03 Mar 2021||₹ 4,424||₹ 4,828|
|02 Mar 2021||₹ 4,521||₹ 4,931|
|01 Mar 2021||₹ 4,481||₹ 4,891|
|28 Feb 2021||₹ 4,553||₹ 4,967|
|27 Feb 2021||₹ 4,553||₹ 4,967|
Historical Gold Price in India
|Months||Lowest Price 24 Karat Gold – ₹ Per 10 Grams||Highest Price 24 Karat Gold – ₹ Per 10 Grams|
Also check : Silver Rate in India
About Gold Price in India
- Gold Rate in India for February-2021
- Gold Rate in India for January-2021
- Gold Rate in India-December 2020
- Factors Affecting Gold Price in India
- Difference Between Carat and Karat
- Difference Between 22k and 24k Gold
- Gold Weight Conversion Table
- Investment Option
- Taxes on Gold in India
- FAQs About Gold
Trend of Gold Rate in India for February 2021 (rates per gram of 24 karat gold)
|Parameters||Gold price (24 karat)|
|February 1 Rate||Rs.5,232 per gram|
|February 28 Rate||Rs.4,967 per gram|
|Highest Rate in February||Rs.5,232 per gram on 1 February|
|Lowest Rate in February||Rs.4,927 per gram on 20 February|
February 2021 - Week 1 (1 - 7):
- Gold rate in India opened the month of February at Rs.5,232 per gram and showed a declining trend during the first week. The price of the metal was at its highest on the day and declined to Rs.5,228 per gram on 2 February.
- The price of the metal on 3 February was Rs.5,159 per gram and dipped to Rs.5,115 per gram with the rise in the dollar value in the international market.
- With a rising risk appetite and shift to the equities market, the gold rate declined to its lowest on 5 February at Rs.5,010 per gram and recovered marginally to Rs.5,115 per gram, closing at Rs.5,041 per gram on 7 February.
February 2021 - Week 2 (8 - 14):
- Gold prices in India opened the second week of the month at Rs.5,042 per gram on 8 February and declined marginally to Rs.5,039 per gram on 9 February due to fluctuations in the international prices.
- On 10 February, the yellow metal’s prices increased to Rs.5,106 per gram and further to Rs.5,171 per gram on fresh hopes of a stimulus package from the United States as well as in India.
- The value of gold dipped eased on 12 February at Rs.5,095 per gram and further to Rs.5,061 per gram and closed the week at Rs.5,062 per gram on 14 February.
February 2021 - Week 3 (15 - 21):
- In India, the price of gold at the start of the third week of February was Rs.5,062 per gram. There was no change in the rate when compared to the closing price of the previous week.
- While the price of the yellow metal remained unchanged over the next two days, it started to slip from 18th February onwards and recorded its lowest price for the month till date on 20th February when a gram of 24-karat gold cost Rs.4,927.
- Gold prices in India recovered slightly on the final day of the week and closed at Rs.4,944 per gram. The overall performance of the precious metal in the country witnessed a declining trend.
February 2021 - Week 4 (22 - 28):
- Gold prices in India opened the last week of the month at Rs.4,944 per gram on 22 February and increased marginally on 23 February at Rs.4,953 per gram due to fluctuations seen in the international market.
- On 24 February, the gold rate in India crossed the Rs.5,000 per-gram mark at Rs.5,019 per gram and dipped marginally on the following day to Rs.5,009 per gram. Due to the dollar value recovering in the market, the price of gold dipped to Rs.4,968 per gram on 26 February.
- Decreasing marginally be Re.1 to Rs.4,967 per gram on 27 February, gold closed the week and the month at a steady price of Rs.4,967 per gram on 28 February.
Trend of Gold Rate in India for January 2021 (rates per gram of 24 karat gold)
|Parameters||Gold price (24 karat)|
|January 1 Rate||Rs.5,079 per gram|
|January 31 Rate||Rs.5,231 per gram|
|Highest Rate in January||Rs.5,471 per gram on 6 January|
|Lowest Rate in January||Rs.4,958 per gram on 17 January|
January 2021 - Week 1 (1 - 9):
- Opening the new year, the gold rate in India was Rs.5,079 per gram on 1 January and increased throughout the week on a lower risk appetite and higher demand for the bullion market. On 2 and 3 January, the price of the metal increased and held steady at Rs.5,099 per gram.
- The price of the metal on 4 January, increased to Rs.5,352 per gram and increased marginally to Rs.5,353 per gram on the following day. On 6 January, gold prices increased further to Rs.5,471 per gram and were the highest price of the week.
- At the end of the week, the price of the metal dipped to Rs.5,466 per gram on 7 January and dipped to Rs.5,417 per gram on 8 January and closed the week at the same price on 9 January.
January 2021 - Week 2 (10 - 16):
- Gold price in India at the start of the second week of January was Rs.5,286 per gram. When compared to the closing price of the previous week, the price for every gram was down by Rs.131.
- Over the next two days, the price of the yellow metal slipped in the country and a gram of the 24-karat gold was priced Rs.5,241 on 12th December.
- While the price of the yellow metal climbed on 13th December, it remained stagnant for the next two days before slipping on the final day of the week. Gold closed the week at Rs.5,251 per gram with the overall performance witnessing an inclining trend.
January 2021 - Week 3 (17 - 23):
- In India, gold prices dipped and opened the third week of the month at Rs.4,958 per gram which was the lowest price of the metal during the month. On 18 January, the price of the metal increased to Rs.5,150 per gram.
- On 20 January, gold rate in India crossed the Rs.5,200 per-gram mark at Rs.5,216 per gram and further increased to Rs.5,227 per gram on 21 January. The price of the metal inclined further to Rs.5,281 per gram on 22 January.
- However, due to the dollar value recovering in the market, gold prices declined and closed the week at Rs.4,988 per gram.
January 2021 - Week 4 (24 - 31):
- In India, a gram of the 24-karat gold was retailed for Rs.4,988 at the start of the final week of January was Rs.5,286 per gram. When compared to the closing price of the previous week, no change was recorded in the price of the yellow metal.
- The price of gold shot up in the country over the next two days and was priced Rs.5,246 per gram before recording a decline in the rates.
- Gold price in India witnessed an inclining trend in the last two days of the week and closed at Rs.5,231 per gram. The overall performance of the precious metal was one of incline.
Trend of Gold Rate in India for December 2020 (rates per gram of 24 karat gold)
|Parameters||Gold price (24 karat)|
|December 1 Rate||Rs.5,111 per gram|
|December 31 Rate||Rs.5,331 per gram|
|Highest Rate in December||Rs.5,373 per gram on 22 December|
|Lowest Rate in December||Rs.4,860 per gram on 4 December|
December 2020 - Week 1 (1 - 6):
- Gold rate in India opened the first week of December at Rs.5,111 per gram. When compared to the closing price of the previous month, the price of the yellow metal was down by Rs.35 for every gram.
- The price of gold climbed over the next two days before slipping to its lowest price for the month till date on 4th December when a gram was retailed for Rs.4,860.
- Gold price recovered over the next two days and closed the opening week at Rs.5,265 per gram, the highest recorded price for the month till date. The overall performance of gold in the country witnessed an inclining trend.
December 2020 - Week 2 (7 - 13):
- In the second week of the month, the gold rate in India opened at Rs.5,266 per gram on 7 December and dipped marginally to Rs.5,243 per gram on the following day. The price of the metal increased to Rs.5,319 per gram on 9 December.
- Hitting its highest on 10 December, gold price was at Rs.5,320 per gram and saw a substantial dip on 11 December at Rs.5,243 per gram.
- After holding steady at the same price on 12 December, the price of gold increased marginally and closed the week at Rs.5,254 per gram on 13 December, recording an overall weekly incline.
December 2020 - Week 3 (14 - 20):
- In India, the price of gold was Rs.5,255 per gram at the start of the third week of December. Gold price witnessed a minimal increase when the rate was compared to what was charged on the final day of the previous week.
- Gold price slipped in the country the following day and a gram was retailed for Rs.5,232. The price remained unchanged on 16th December before recording an incline in the rates.
- Gold price in India closed the week at Rs.5,341 per gram. This was the highest recorded price of the yellow metal for the month till date. Gold’s overall performance witnessed an inclining trend in the rates.
December 2020 - Week 4 (21 - 27):
- Gold rate in India opened the fourth week of December at Rs.5,342 per gram on 21 December and showed an overall declining trend for the week, after increasing to its weekly high at Rs.5,373 per gram on 22 December.
- However, due to vaccine optimism, the price of the metal fell to Rs.5,362 per gram on the following day, dipping further to Rs.5,319 per gram on 24 December.
- On 25 December, the price of the metal was Rs.5,320 per gram, increasing marginally to Rs.5,321 per gram and closed the week on 27 December at Rs.5,322 per gram as investors awaited on the decision by the U.S. government on the stimulus package.
December 2020 - Week 5 (28 - 31):
- The price of gold in India at the start of the final week of December was Rs.5,323 per gram. There was a minimal increase in the price of the yellow metal when the rate was compared to the closing price of the precious week.
- Gold price in India climbed gradually over the week and closed at Rs.5,331 per gram.
- The overall performance of gold in the country witnessed an inclining trend in the rates.
Trend of Gold Rate in India for November 2020 (rates per gram of 24 karat gold)
|Parameters||Gold price (24 karat)|
|November 1 Rate||Rs.5,194 per gram|
|November 30 Rate||Rs.5,146 per gram|
|Highest Rate in November||Rs.5,525 per gram on 10 November|
|Lowest Rate in November||Rs.5,145 per gram on 30 November|
November 2020 - Week 1 (1 - 8):
- In the country, the gold rate in India in November opened the month at Rs.5,194 per gram on 1 November and showed an inclining trend for the first week due to the uncertainty around the U.S. elections.
- On 3 November, the price of the metal had increased to Rs.5,268 per gram and further increased to Rs.5,416 per gram on 5 November as Europe’s lockdown continued due to the rise in COVID-19 cases.
- The price of the metal on 7 November was Rs.5,461 per gram and increased to hit its weekly high at the end of the week at Rs.5,504 per gram on 8 October.
November 2020 - Week 2 (9 - 15):
- In India, gold opened the second week of November at Rs.5,505 per gram. When compared to the closing price of the previous week, the price of the yellow metal was up by Re.1.
- The price of gold increased in the country the next day and was retailed at the highest recorded price for the month till date. A gram of the 24-karat gold was retailed for Rs.5,525 on the mentioned date.
- Gold rate in India closed the week at Rs.5,428 per gram. The overall performance of gold witnessed an inclining trend.
November 2020 - Week 3 (16 - 22):
- Gold rate in India opened the third week of the month at Rs.5,429 per gram on 16 November and showed a declining trend as risk appetite amongst investors were high on speculations over the COVID-19 vaccine.
- On 18 November, the price of the metal dipped to Rs.5,417 per gram and on the following day, the metal’s value dipped to below the Rs.5,400 per gram mark at Rs.5,384 per gram on 19 November.
- After increasing marginally to Rs.5,386 per gram on 21 November, the gold rate decreased and closed the week at Rs.5,362 per gram in the country.
November 2020 - Week 4 (23 - 30):
- Gold rate in India opened the last week of the month at Rs.5,362 per gram on 23 November and dipped marginally on 24 November to Rs.5,361 per gram as the metal’s demand remained steady in the market.
- On 25 November, the price of the metal showed a marginal incline at Rs.5,263 per gram and dipped substantially to Rs.5,199 per gram on 26 November as the value of the dollar rose in the market.
- With progress seen in the making of potential COVID-19 vaccines, the risk appetite amongst investors increased and the metal hit its monthly low on 29 November and closed at Rs.5,146 per gram.
Trend of Gold Rate in India for October 2020 (rates per gram of 24 karat gold)
|Parameters||Gold price (24 karat)|
|October 1 Rate||Rs.5,342 per gram|
|October 31 Rate||Rs.5,267 per gram|
|Highest Rate in October||Rs.5,434 per gram on 13 October|
|Lowest Rate in October||Rs.5,257 per gram on 30 October|
October 2020 - Week 1 & 2 (1 -11):
- In India, gold price opened the month of October at Rs.5,342 per gram on 1 October and increased to Rs.5,380 per gram on 5 October as the demand for the metal was steady due to the rising number of COVID-19 cases.
- However, as the value of the U.S. dollar increased, the price of gold fell to Rs.5,336 per gram on 6 October and increased again on 8 October at Rs.5,387 per gram. The metal hit its lowest price of the month on 9 October at Rs.5,335 per gram.
- On 10 October, the gold rate in India increased to Rs.5,396 per gram as the rising number of cases provided support to the metal. Gold closed at its highest price at Rs.5,397 per gram.
October 2020 - Week 3 (12 - 18):
- A gram of the 24-karat gold was retailed for Rs.5,398 in India at the start of the third week of October. When compared to the closing price of the previous week, there was a minimal increase in the rates.
- The price of gold recorded its highest price for the month till date on 13th October. Consumers were required to pay Rs.5,434 for a gram on the mentioned date.
- Gold price in India closed the week at Rs.5,377 per gram after the rates witnessed slight fluctuations. The overall performance of the yellow metal witnessed an inclining trend.
October 2020 - Week 4 (19 - 25):
- Opening at Rs.5,378 per gram on 19 October, gold rate in India showed a declining trend as the value of the dollar recovered in the market ahead of the speculations surrounding the stimulus package in the United States of America.
- The price of the metal on 22 October crossed the Rs.5,400 per gram mark at Rs.5,411 per gram and increased to hit its weekly high at Rs.5,413 per gram on 23 October.
- However, at the end of the week, gold prices declined to Rs.5,301 per gram on 24 October and ended the week at Rs.5,290 per gram on 25 October.
October 2020 - Week 5 (26 - 31):
- Gold price in India opened the fifth week of October at Rs.5,290 per gram. When compared to the closing price of the previous week, there was no change in the rates.
- While the price of the yellow metal remained unchanged the next day, it climbed to Rs.5,311 on 28th October. Gold price slipped to Rs.5,257 on 30th October to record its lowest price for the month.
- Gold closed the week at Rs.5,267 per gram after recording an incline of Rs.10 for every gram. The overall performance of gold recorded a declining trend in the rates.
Factors Affecting Gold Price in India
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 fixed deposits 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 Rate is Different in Different Cities 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).
What is the Difference Between Carat and Karat?
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.
What is the Difference Between 22k and 24k Gold?
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.
Demand for Gold in India
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.
Why is Gold Considered so Valuable?
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.
Gold as an Investment in India
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 Trading as a Commodity 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)
Gold Futures Contracts on MCX
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
- 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
- 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
- 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
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|
|Troy ounces||Penny weights||20|
|Troy ounces||Avoirdupois ounces||1.09714|
|Avoirdupois ounces||Troy ounces||0.911458|
|Short tonne||Metric tonne||0.9072|
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.
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.
Gold Rate in the Most Popular Indian Cities
Trend of Gold Rate in India for September 2020 (rates per gram of 24 karat gold)
|Parameters||Gold price (24 karat)|
|September 1 Rate||Rs.5,287 per gram|
|September 30 Rate||Rs.5,336 per gram|
|Highest Rate in September||Rs.5,499 per gram on 17 September|
|Lowest Rate in September||Rs.5,103 per gram on 26 September|
September 2020 - Week 1 (1 - 6):
- Gold price in India opened the month of September at Rs.5,287 per gram on 1 September after declining substantially compared to the closing price of the previous month at Rs.5,456 per gram.
- On 2 September, the price of the metal increased marginally to Rs.5,292 per gram and crossed the Rs.5,400 per gram mark on the following day at Rs.5,461 per gram on 3 September.
- At the end of the week, the gold rate closed at Rs.5,412 per gram with an overall incline for the week.
September 2020 - Week 2 (7 - 13):
- In India, gold opened the second week of September at Rs.5,413 per gram. There was a minimal increase in the rate of the yellow metal when compared to the closing price of the previous week.
- The price of gold increased in the country over the next few days and recorded its highest price for the month on 11 September. A gram of the 24-karat gold was retailed for Rs.5,483 on the mentioned date.
- Gold rate in India slipped over the last two days of the week and closed at Rs.5,439 per gram. The overall performance witnessed a declining trend in the rates.
September 2020 - Week 3 (14 - 20):
- Gold opened the third week of September at Rs.5,440 per gram in India. When compared to the closing price of the previous week, there was a minimal increase in the rate of the yellow metal.
- The price of gold increased in the country over the next few days and recorded its highest price for the month on 17th September. On the mentioned date, a gram of the 24-karat gold was retailed for Rs.5,499.
- Gold rate in India closed the week at Rs.5,287 per gram with the overall performance being stable.
September 2020 - Week 4 (21 - 27):
- In the fourth week of the month, gold prices opened at Rs.5,488 per gram on 21 September and showed a declining trend throughout the week. On 22 September, gold price in India dipped marginally to Rs.5,477 per gram.
- On 24 September, the metal fell below the Rs.5,400 per gram mark at Rs.5,347 per gram and decreased further on the following day at Rs.5,319 per gram.
- The gold rate hit its lowest on 26 September at Rs.5,103 per gram due to the rise in the dollar value and increased risk appetite. At the end of the week, gold closed at Rs.5,303 per gram.
September 2020 - Week 5 (28 - 30):
- Gold price opened the final week of September at Rs.5,304 per gram in India. There was an increase of Re.1 when compared to the closing price of the previous week.
- While the price of gold slipped the next day, it recovered on the final day of the month.
- Gold price in India closed September at Rs.5,336 per gram. The overall performance of the yellow metal witnessed a declining trend in the rates.
Trend of Gold Rate in India for August 2020 (rates per gram of 24 karat gold)
|Parameters||Gold price (24 karat)|
|August 1 Rate||Rs.5,481 per gram|
|August 31 Rate||Rs.5,456 per gram|
|Highest Rate in August||Rs.5,930 per gram on 9 August|
|Lowest Rate in August||Rs.5,346 per gram on 2 August|
August 2020 - Week 1 (1 - 9):
- At the beginning of August, gold price in India opened at Rs.5,481 per gram and had inclined by Rs.180 compared to its previous closing at Rs.5,301 per gram at the end of August.
- Gold rate showed an inclining trend with the rising number of COVID-19 cases all over the world along with stimulus packages being released by the U.S. Federal Reserve to help the economy stabilise.
- The metal crossed the Rs.5,500 per gram mark on 6 August and hit record highs at Rs.5,930 per gram on 9 August, closing the week at an overall incline.
August 2020 - Week 2 (10 - 16):
- Gold price in India at the start of the second week of August was Rs.5,562 per gram. There a massive drop in the rate of the precious metal when compared to the closing price of the previous week.
- Gold price saw a lot of fluctuations over the week in the country. While the rates fell on 11th and 12th of August, gold price recovered and climbed to Rs.5,591 per gram on 14th August.
- The price of the yellow metal closed the week at Rs.5,510 per gram with the overall performance witnessing an inclining trend.
August 2020 - Week 3 (17 - 23):
- Gold price in India during the third week of August opened at Rs.5,511 per gram on 17 August and dipped marginally on 18 August to Rs.5,510 per gram. The metal held steady on 19 August.
- On 20 August, the value of the metal increased to more than Rs.5,600 per gram to Rs.5,657 per gram and dipped yet again on 21 August to below the Rs.5,600 per gram mark to Rs.5,586 per gram.
- Gold rate on 22 August was Rs.5,596 per gram, increasing marginally compared to the previous day’s closing value. Gold price decreased and closed at Rs.5,596 per gram.
August 2020 - Week 4 (24 - 31):
- Gold price in India at the start of the final week of August was Rs.5,562 per gram. When compared to the closing price of the previous week, there was an increase of Re.1 in the price of the fuel.
- Gold price slipped in the country over the next few days before increasing to Rs.5,521 per gram on 28th August. The price of the precious metal dipped again the following day before increasing over the last two days of the month.
- The price of gold closed the month at Rs.5,456 per gram with the overall performance witnessing a declining trend.