The yellow metal has been a source of attraction in terms of its lustre, safe haven status,and easy liquidity and more than anything else, the traditional attachment to it in countries like India.The metal has rallied aggressively of late.After a historic high of about $ 1917 an ounce in Aug 2011, it has touched a high of about $ 1880 now! [One (troy) ounce=31.1 grams and $1~Rs.75/].Since silver is a by product,its price follows in tandem with that of gold and also because it has several uses in different industries. In India, gold attracts an import duty plus GST with a total tax incidence of about 15%..The same tax incidence holds good for silver too.
Back home, the price of pure gold (24 ct) has crossed Rs 51,000/-per 10gm and that of ornament gold ( 22 ct) has crossed Rs.48,000/- per 10 gm , though the prices change somewhat from place to place.The prohibitively high price has kept the retail demand subdued.
Back home, the price of pure gold (24 ct) has crossed Rs 51,000/-per 10gm and that of ornament gold ( 22 ct) has crossed Rs.48,000/- per 10 gm , though the prices change somewhat from place to place.The prohibitively high price has kept the retail demand subdued.
Gold is continuously traded as the international gold market is a globe-spanning market and the price keeps fluctuating.As is the case with most commodities, the price of gold is driven by supply and demand along with speculative demand.The price is decided by several factors such as currency fluctuations, central banks’ gold reserves, interest rates, jewellery markets, economic uncertainties, returns on equity markets, price of crude, geopolitical events, trade wars, military wars etc. For sure, the price of gold is determined by global developments.
With so many factors deciding the price, it is difficult to say whether the rush for gold and the price surge is sane or insane ! Among the top ten countries with gold holdings,the US stands at the top with about 8133 metric tons, China is at the 6 th position with about 1948 metric tons and India at the 9 th position with about 655 metric tons.Gold’s share of forex reserves is 78.9% for the US and 3.4% for China and 7.5% for India.
My next post would be on Wednesday the 29 th at 8 am !
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