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Why Gold Rate is Increasing in India...?
Hello Everyone,

              Please tell me, why Gold Rate is Increasing in India...?
1. Uncertainty about the Economy is making investors flock to Gold which has delivered returns in the past few years.
2. Lack of Investment opportunities along with cultural demand of Gold is shoring up consumption of Gold in India
3. Depreciating currency is aiding in the rise of Gold further
4. Multipurpose use of Gold is also aiding in increased consumption. In India we can use Gold as security, as investment, as loan guarantee commodity and we can also get loan on simply pledging gold.
5. We are also entering festive seasons.

When will price reduce

Price of Gold will only reduce when there are other viable investment options. This will only happen if the economy begins to stabilize and investments are attracted into other assets. This will take some time as Indian economy is stuck in a vicious cycle. When the Economy stabilizes, INR will begin to appreciate and this would soften the price of Gold. A Economy which is prospering is the perfect recipe for Gold to come down. At this juncture, Indian Economy is struggling. So demand for Gold will rise.
70% of Gold is imported. if dollar rate increases then Gold prices increases as you are buying firstly dollars in order to buy gold.

For example- if 1 dollar is 60 rs then one has to buy a dollar with 60rs

Currently 1dollar is 67rs then one have to pay 7rs more to buy a dollar and with increase of 7rs(dollar rate), the gold price increases for importing gold in India.

PS: when India export, Rs. Becomes stronger. When India import, Rs becomes weaker in comparision to dollar

I assume you mentioned United states dollar(USD).
thanks for advise...
Because of inflation

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