Gold prices in India decreased on September 1, 2024, mirroring a global trend driven by strengthening dollar and US treasury yields. The latest US inflation data matched expectations, contributing to this price movement. This article delves into the current gold rate in India, exploring factors influencing its price, and providing a snapshot of retail gold prices across different cities.

Gold Price in India Today

On September 1, 2024, the price of gold in India settled around Rs 73,000 per 10 grams. The 24-carat gold, known for its purity, was priced at Rs 73,040 per 10 grams. Meanwhile, the 22-carat gold, preferred for jewelry due to its durability, was priced at Rs 66,950 per 10 grams. Silver was trading at Rs 87,000 per kilogram.

Impact of Global Market Trends

The decline in gold prices in India is directly tied to the movement of international gold prices. The US dollar and US treasury yields strengthened following the release of the latest US inflation data, which matched expectations. This strengthening of the dollar pushed down the price of gold, as investors shifted towards US assets.

Cultural Significance and Investment

Gold holds immense cultural significance in India, deeply ingrained in traditions and celebrations. It serves as a key investment asset and is central to ceremonies like weddings and festivals. These deeply rooted cultural practices drive demand for gold in the Indian market, making it an attractive commodity.

Retail Gold Price in India

The retail gold price in India comprises various factors besides its intrinsic value. It is influenced by factors like making charges, import duties, GST, and the retailer’s profit margin.

City-Wise Variations

Gold rates can vary from city to city based on factors such as local demand, transportation costs, and retailer markups. For example, gold may be priced differently in Mumbai compared to Chennai or Kolkata due to differences in these factors.

Factors Shaping Retail Prices

Making Charges

Making charges are fees applied to jewelry pieces, reflecting the craftsmanship and intricate designs involved in creating them. These charges vary depending on the design complexity and the metal weight.

Import Duties and GST

Gold imports attract duty charges levied by the government, contributing to the overall retail price. The Goods and Services Tax (GST) also applies to the purchase of gold, further influencing the price paid by consumers.

Retailer’s Margin

Retailers add a profit margin to their gold sales to cover operational costs and generate revenue. This markup adds to the final price consumers pay for gold jewelry or ornaments.

Gold as a Safe Haven Asset

Gold is often considered a safe haven asset in times of economic uncertainty or market volatility. This is because gold prices tend to rise during times of inflation or global economic turmoil. Investors tend to seek refuge in gold, viewing it as a stable and secure asset.

Considerations for Gold Investment

While gold can provide a hedge against inflation and market volatility, investors need to consider various aspects before investing in gold:

Liquidity

Gold is relatively liquid, meaning it can be easily bought and sold. However, selling large quantities of gold quickly might be challenging.

Storage

Storing gold securely and ensuring its safety are crucial considerations for investors. Physical gold needs to be stored in a secure location to protect it against theft or damage.

Market Volatility

Gold prices can be volatile, fluctuating based on market sentiment, geopolitical events, and economic factors. Investors must be prepared for potential price fluctuations when investing in gold.

Take Away Points

• Gold prices in India are influenced by global gold prices, dollar strength, US treasury yields, and domestic market factors.
• The cultural significance of gold in India plays a major role in driving domestic demand.
• Retail gold prices in India are influenced by factors like making charges, import duties, GST, and retailer markups.
• Gold prices can vary across cities due to differences in demand, transportation costs, and retailer markups.
• Gold is considered a safe haven asset, but investors must consider factors like liquidity, storage, and market volatility before investing.