Gold price by Investorocean.com
What Drives Gold Prices in India Gold Market
The affinity for Gold for Indians is impenetrable and has been tested repeatedly, but the metal has proved its mettle over time. However, the price of gold is not consistent throughout and has had its share of difficulties. There are several factors, which affect the prices of gold in Indian gold market, such as:
The Central Reserve
The central reserve i.e. the Government, when starts to hold or procure gold in their reserve, the price of the gold goes up because of increased cash flow.
Gold Volatility
Market volatility in terms of recession or inflation affect the price of Gold. Gold is one investment, which is not effected by inflation as a result when inflation hits, because of the liquidity factor the metal its price goes up.
Gold Interest Rate
An increased interest rate in the market encourages investors to acquire more cash by selling off gold, as such the amount of gold in the market increases and with increase in supply, the rate of gold can drop.
Global Gold Market
As a crisis commodity, Gold is a favoured acquisition for import by the government and market around the globe. More imports from global entities of Gold makes way for increased rate and vice versa.
Monsoon
As unlikeable as it may sound, the price of gold may very well be affected by a good monsoon – and that is because 60% of all consumption of the yellow metal is accounted by the rural sector, which primarily is dependent on a good monsoon for better crops. A decreased monsoon will tend to have excess gold in the market on lesser rate as rural India tends to sell them.
Domestic Gold Demand
India is primarily in love with the metal, for any occasion such as marriage, and festivals the demand of gold goes up and hence results in increased rates.
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