In the international market, gold was trading marginally higher at USD 1,729 per ounce and silver was flat at USD 25.12 per ounce. Here is looking at major reasons that determine the price of gold in India.
Gold prices have come down heavily recently, with investors and buyers taking the window as the right time to enter the bullion market. On March 24 (Wednesday) gold prices went through a heavy dip, falling by Rs 149 to Rs 44,350 per 10 gram in the national capital. In the previous trade, it had closed at Rs 44,499 per 10 gram. In the international market, gold was trading marginally higher at USD 1,729 per ounce and silver was flat at USD 25.12 per ounce.
Here is looking at major reasons that determine the price of gold in India.
Demand and Supply of gold
The price of the yellow metal depends on the basic demand and supply formula. Gold (as found naturally) has become a very scarce commodity. Not many nations have a huge reserves of gold. Hence gold prices depend on the demand and supply factor in context with its demand in India.
Import rates behind gold price
This is also the derivation of the above factor which is basic demand and supply. India uses most of the gold from import so whenever the import rates increase, they reflect in pricing of gold in the country. India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. In volume terms, the country imports 800-900 tonnes of gold annually.
Rates of US Dollar behind gold price
Gold prices are inversely proportional to dollar rates. On the basis of the performance of dollar, gold rates are determined. Since gold is an internationally traded commodity and greenback is the widely preferred international currency, the relationship is extremely critical between the yellow metal and US dollar
International or geopolitical relations depend on gold price
International or geopolitical relations among nations also have a big role in gold prices. It has been always witnessed that gold rates soar whenever tensions spike between global powerhouses.
Source: Zee News