Gold prices in India have been on a continuous rise and the upcoming Diwali festival is generating a lot of demand for the yellow metal. Let’s see 7 factors that usually affect the gold prices in India.
Since most of the gold sold in India is imported, international gold prices affect gold prices in India.
The strength of the Indian rupee against the US dollar impacts gold prices. A weaker rupee makes gold more expensive as gold prices are quoted in US dollars.
Seasonal demand like festivals and weddings and changes in supply due to factors like mining input influence prices.
A weaker currency drives people to invest in safer assets, like gold that act as a hedge against inflation. This increases demand and the prices of gold.
Import duties, taxes and regulations on gold can affect prices in the local markets. Changes in these policies can lead to price fluctuations.
Political instability, economic sanctions or global tensions can drive investors towards gold as a safe haven.
Sentiments of traders and speculative investments can lead to price volatility in the gold market.
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