Know More about Gold Price| Espresso

Know More about Gold Price

Gold is one of the most precious and expensive items in the Indian household. India is the largest consumer of gold in the world with over 2,000 tons of unused gold. Indians consider gold to be an integral part of their lives, where the gold price commodity market is very high.

Published on 26 March 2024

Over the years, gold commodity price has hiked exponentially from Rs.71.75 for 10 gm in 1965 to approx Rs.68, 000 for 10 gm in 2024. Due to this, gold is seen to be the safest bet among people, offering various options, such as gold coins, bars, gold ETFs, etc. 

What is the Current Trends in Gold Prices

Gold prices reached a new all-time high in early March, rising by over 6% in the first week of the month to trade well above US$2,100/oz. This increase can be attributed to USD weakness, a decline in US Treasury yields, increased market volatility, and other factors.

However, the domestic landed price in India saw a smaller increase of 4% to INR 66,529/10g due to the rupee's strength (0.2% appreciation w/w). The spike in MCX gold price live has further depressed gold jewelry demand, with both rural and urban centers experiencing a drop in demand despite the ongoing wedding season.

Demand is unlikely to see a notable uptick in the next couple of months, even if prices moderate, due to the impending general elections (April to June) in India, which will see the movement of gold and cash closely monitored. Some improvement in demand could be expected around Akshaya Tritiya (10 May), a traditionally auspicious time to buy gold.

Factors That Can Affect the Gold Price

  • Supply: Gold is scarce, and its supply is not constant, impacting prices based on demand and availability.
  • Import Rates: With India relying heavily on gold imports, import duties influence gold commodity price today directly.
  • US Dollar: Gold prices move inversely to the US dollar; a stronger dollar often means lower gold prices.
  • International Relations: Global tensions can increase gold prices, as it's seen as a safe investment during instability.
  • Seasonal Demand: Festive and wedding seasons increase demand, affecting prices in India due to cultural traditions.

Benefits of Investing in Gold

  1. Hedge against Inflation: Inflation erodes the value of currency, but gold tends to retain its value or even increase commodity gold price live during inflationary periods. Therefore, investing in gold can help protect your wealth against the effects of rising prices.
  2. Diversification: Gold has minimal correlation compared to other asset classes such as stocks and bonds. Including gold in your investment portfolio can help reduce overall risk by diversifying across different types of assets.
  3. Store of Value: Gold has been acknowledged as a valuable asset for centuries. It holds its worth over time and can be easily converted into cash when needed, making it a reliable asset to hold for the long term.
  4. Safe Asset: During times of economic uncertainty or market volatility, gold is often seen as a haven asset. It functions as a buffer against financial volatility and offers stability.
  5. Cultural Significance: Gold holds immense cultural significance in India. It is an integral part of various traditions, festivals, and occasions, making it a preferred choice for gifting and personal adornment.
  6. Liquidity: Gold is highly liquid, meaning it can be easily bought or sold in the market. India has a well-established infrastructure for buying and selling gold, ensuring ease of transactions.
  7. Long-term Investment: While short-term fluctuations are common, historical data suggests that gold prices have generally risen over the long run. Investing in gold can therefore be a profitable long-term investment strategy.
  8. Global Demand: There is a lively market for buying and selling gold because of its demand on a global scale. The value and liquidity of gold investments are influenced by this worldwide demand.
  9. Accessible Investment Options: There are several ways to invest in gold in India, including actual gold (jewelry, coins, and bars), gold mutual funds, gold exchange-traded funds (ETFs), and gold savings plans provided by banks and other financial organizations. These options make it easy for investors to participate in the gold market based on their preferences and financial goals.

What Are the Investment Opportunity in Gold

Gold Bars: Gold bars, also known as bullion, are a popular choice for investors looking to buy physical gold. Bullion is typically sold by gram or ounce, with purity, manufacturer, and weight stamped on the face of the bar. Investing in gold bars provides a tangible asset that can be stored securely.

Gold Coins: Gold coins, such as the American Gold Eagle and the Canadian Maple Leaf, are popular collectibles that command a premium over the gold price. While you'll pay extra for the collectible value and craftsmanship, these coins offer a convenient and easily tradable form of gold investment.

Gold Jewelry: Buying gold in the form of jewelry is another option, although it typically comes with a premium of 20% to 300% over the gold price, depending on the manufacturer and design. While jewelry may offer aesthetic value, investors should be aware of the additional costs involved.

Gold Stocks: Investing in the stocks of gold mining or processing companies provides exposure to the gold industry without owning physical gold. The value of gold stocks is influenced by the rise and fall of the price of gold in the market, offering investors a way to benefit from gold price movements.

Gold Futures Contracts: Without holding the actual gold, investors can speculate on the price of the metal using futures contracts. A buyer commits to buying a certain amount of gold at a predefined price on a future date. Gold futures are used by sophisticated investors to hedge their portfolios and manage price risk.

Gold Funds: Mutual funds and exchange-traded funds (ETFs) offer investors exposure to gold through investments in gold stocks or gold derivatives. These funds provide a convenient way to invest in gold without the need to directly purchase and store physical gold.

Concluding Remarks!

Gold can be a great option for traders to invest their money as MCX gold price live serves as a hedge against inflation. Historically, the gold price has grown rapidly, offering great returns. Shortly, the gold commodity price today can fluctuate but it will provide a return to traders.

Chandresh Khona
Team Espresso

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