How And Why Gold Prices In India Change?

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Gold prices in India are influenced by a host of factors. Among these include how the central banks across the globe are buying and selling gold. These days there is not a lot of storage that takes place with the central banks of each country. When this happens it could lead to a sharp volatility in the prices of gold. In short, this is the demand that emerges from the central bank's of the country.

How And Why Gold Prices In India Change?
When there is a larger than expected demand, from the central banks it could push gold prices higher and hence the prices of gold in India also tend to move higher. The other factor that influences gold prices is the role played by Gold ETFS in the country. When gold ETFs buy, it leads to a rise in the gold prices in the international markets, which ultimately have a bearing on the gold prices in Chennai.

Cross currency headwinds can also impact the precious metal. For example, a sharp gain in the dollar can make gold prices fall. In short, gold prices today in India are impacted by a host of factors and there is no single reason that has a major impact. At best you can say that it is multiple factors that come into play, as far as gold is concerned.

You cannot buy gold based on timings and predictions. It is always very difficult to predict the reasons for the change in prices of the precious metal. One of the big reasons is currency movement and these things are essentially out of the control of individuals. So, if you can factor in currency in the prices of gold, it is a good thing or else, you can buy gold at the prices that you wish to. In any case, buy only when prices drop. If you are unable to rightly predict the prices of gold then you can seek expert opinion from analysts and other experts. Jumping on the gold wagon, just because others are buying is foolhardy and full of risks.

Stick to the basic mantra where you sell high and buy low. In this context set yourself some levels like you would want to buy when prices reach levels of Rs 27,000 and sell the same when they hit levels of Rs 29,000. So, stick to the price bands to gain some benefits from them in case rates are rising all over again. It is always a great idea to just check the gold rates in India before you invest in the same.

So, in short gold prices change on account of demand and supply, currency fluctuations, buying from central banks, local levies and duties etc.  The gold prices in India are largely fixed by the bullion association, which in turn is fixed by the gold retailers in the country.

It is always advisable to check gold prices in India before you buy. If you are looking at averaging it would be good to buy in small quantities so as to avoid losses with volatility in prices of the metal.

Read more about: gold
Story first published: Saturday, September 2, 2017, 7:35 [IST]
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