Gold is a precious metal with indisputable value. Indo-Persian art and architecture is rich in details with the use of gold, which has been prevalent since ancient times. The history of India’s love for gold dates back to thousands of years ago when it was used as a commodity and later became currency since then have been enriched by the use of gold objects, ornaments, and jewelry.
Gold is held in high regard in India, a land where traditions and customs are paramount. If it were not so, how can Indians celebrate festivals without gold? In this day and age, the gold price fluctuates but buying is a ritual that continues irrespective of its price.
It’s common to see a lot of people taking things at face value, and gold is no exception. It’s not always easy to get people to go over the actual costs of something, so gold presents that same issue without being more difficult to understand.
Commodities are basic items needed for life. They include food, fuel, and water. The market for commodity trading works in a manner similar to stock markets in that many brokers make markets on a daily basis, bidding up or lowering prices of valuable commodities based on the economic fundamentals. Also, like the stock market, there is volatility as well as a risk with speculation.
MCX is the exchange for trading commodities, just like the BSE is for trading stocks of companies and other financial instruments. You can trade gold, silver, and other precious metals along with agricultural commodities like cotton, coffee etc. The Exchange provides secure and transparent trade mechanisms and works in conformity with the regulatory framework.
Let’s dive deep into the factors affecting the price of gold in Ahmedabad.
The gold prices in Ahmedabad are subject to change depending on the inflation rate. When the inflation rate rises, the prices of everything from food to fuel rise as well. This increases the demand for gold and makes it more expensive. When this happens, the day-to-day gold rates are often higher than previous periods.
The Reserve Bank of India is responsible for the management of India’s foreign exchange, gold and forex reserves. The role of the RBI in the gold market is crucial as it holds Rs.3,74,020 crores worth of government held gold reserves. Like all central banks, the RBI holds gold reserves for the future, and it has a crucial impact on the gold rate.
The market for gold items increases during the wedding season. Indians buy gold as gifts and ornaments during Diwali, Deepavali and other festivals. This creates a surge in demand for gold and the price shoots up.
Many people are familiar with the jewelry market and understand the demand and supply of gold. However, most people are unaware of how much gold is actually involved in the manufacturing of electronic devices such as mobile phones and computers. When these companies purchase gold to use in their products, it increases the demand for this precious metal. This has led to its price rising to an all-time high since 2009, which causes a financial burden on many families around the world.
As a consumer of gold, you need to be aware of the effect on gold price. The gold price in India is also dependent on the policy changes in the gold mining companies. For instance, if the gold mining companies decide to increase the production cost, it will reflect on the gold prices.
Gold rates are heavily dependent on how the US dollar performs, with prices inversely proportional to dollar rates. This relationship arises from the fact that gold is an internationally traded commodity and the US dollar is the preferred international currency. Any changes within the United States are bound to have an effect on gold prices, either directly or indirectly.