The gold market in India experienced a notable increase today, with the price of 22-karat gold rising by ₹1500 per 100 grams. As of today, the price for 10 grams of 22-karat gold stands at ₹6,340, while 24-karat gold is priced at ₹6,916 per 10 grams​ (Goodreturns)​​ (Goodreturns)​. This uptick in prices follows a period of volatility over the past month, with significant fluctuations observed due to a combination of global and domestic factors.
Factors Influencing Gold Prices
Several global and domestic factors have influenced today’s gold prices:
- US Federal Reserve Policies: The recent cooling of US inflation data has led to increased speculation about a potential rate cut by the US Federal Reserve in its upcoming September meeting. This has provided a boost to bullion prices globally, as lower interest rates reduce the opportunity cost of holding non-yielding assets like gold​ (Goodreturns)​.
- Seasonal Demand: There has been a seasonal slowdown in the demand for physical gold, particularly in key markets such as China. This is due to a combination of economic factors, including a recessionary trend affecting the retail and jewelry investment sectors​​.
- Indian Government Policies: Domestically, the Indian government’s recent reduction of basic customs duties on gold and silver from 15% to 6% has played a significant role in the recent price movements. This policy change has made gold more affordable, thereby affecting local demand and prices​ .
- Market Sentiment: Market sentiment has also been influenced by the performance of the Indian rupee against the US dollar. A stronger rupee tends to make gold cheaper for Indian buyers, whereas a weaker rupee has the opposite effect. Additionally, geopolitical uncertainties and economic data releases continue to impact investor sentiment and gold prices​.
- Local Market Dynamics: Within India, gold prices vary across different cities due to local market factors such as demand and supply, state government taxes, and transportation costs of physical gold. For example, today’s gold prices in major cities like Mumbai, Delhi, Chennai, and Bangalore hover around ₹6,340 per 10 grams for 22-karat gold​.
The interplay of these factors has led to the current surge in gold prices in India. Market experts predict that if the US Federal Reserve proceeds with the expected rate cut, gold prices might witness further upward movement in the coming weeks. However, sustained bullish trends would require gold prices to surpass key resistance levels in international markets​​.
For investors and consumers, staying informed about these influencing factors is crucial for making well-timed decisions regarding gold purchases and investments.
