Agra Investment：Physical Gold Vs Gold ETFs Vs Gold Funds Vs SGB – Which is Best？

Gold is the most precious metal for Indians and a preferred choice in the form of jewellery. Many investors prefer them in other forms like gold coins, bars, gold ETFs, digital gold, etc. Also, buying gold on festivals and occasions is considered to be auspiciousAgra Investment. Furthermore, buying gold acts as a hedge against inflation whenever there is a fall in the economy. Thus, the gold rate in India fluctuates and is affected by many internal and external factors.

The following are the factors that affect gold rate in India –

The following are the reasons why gold rates are different in different cities in India –

Indians have a fascination towards gold. Gold is the most cherished metal and is flaunted in the form of jewellery on every occasion. But the gold rate in India is not fixed. It fluctuates every day based on market conditions.

There are several ways that affect the gold rate in India, which helps to determine the gold prices. One of the primary reasons is the geopolitical situation across the globe. For instance, when the Presidential elections were held in the USA, the price of gold rallied initially and then fell again. It was because investors felt that equity shares were performing better. Later on, investors understood that the new President’s policies might be volatile, leading to a gold price hike. There are several other factors that determine the gold rate in India –

The currency performance is the major determinant of global prices of this metal. And the most important currency is the USDKolkata Investment. If USD appreciates, then gold rates are likely to move down worldwideBangalore Wealth Management. Domestically, when the Indian rupee is stronger, gold prices are lower.

Also Read How Gold Affects Currency Value?

The gold rate in India is dependent on the global prices of this metalNew Delhi Stock Exchange. Also, India imports most of its goldGuoabong Wealth Management. Therefore, whenever there is a change in the global rate of gold, the import prices are also altered accordingly. Moreover, the market price of gold in India is a reflection of import prices.

All nations have a central bank that holds gold and currency for future use. In India, the Reserve Bank of India also has a gold reserve. Therefore, when these banks across the world acquire more gold for reserve, it leads to a rise in gold prices.

There are certain reasons for the rise in consumer demand for gold. For instance, the demand for gold is higher during a wedding season or festival. When the demand is more, there is an imbalance in the demand-supply ratio. This leads to a rise in gold rates.

Apart from the above factors, several other factors determine the gold rate in India. At a particular time, the gold price will also depend on interest rates and inflation in the country. Hence, the price of this yellow metal will continue to fluctuate for several reasons.

The following are the various gold options available to buyers –

Read in detail about the types of gold investment options.