Gold Price: Gold has traditionally been the choice of Indian consumers. Last year it crossed 56,000 levels. However, later this height could not be maintained and it was broken down to 45 thousand rupees per 10 grams. But once again the bullish phase continues in gold and has dropped after touching 50 thousand rupees. According to a Bloomberg report, rising inflation, the dollar’s move against the rupee, and the sentiment of investors toward gold demand and cryptocurrencies will have a major impact on gold prices in the coming days. Experts say gold could hit 55,000 rupees again by the end of this year and there are many reasons for it.
First: how rising inflation affects
Commodity prices have increased sharply in the past six months. Gold gets double whammy due to rising commodity prices. Gold is also a commodity, which affects its price. At the same time, the overall retail inflation increases by one per cent, due to the 10 per cent cost of fuel included in the goods. Gold is also expensive.
Second: the rupee-dollar-gold relationship
Most of the gold is imported into the country. Gold imports become expensive when the rupee weakens against the dollar. This affects gold prices. On the other hand, gold becomes cheaper when the rupee is strong.
Third: Demand drives up prices
The price of gold depends on two types of demand. The first is investment and the second is demand for festive buying. Since the beginning of the corona crisis, the demand for investments has only increased in the form of safe investments. Lockdown has seen a decline in festival purchases. If the vaccination picks up and the markets open as usual, the demand for the festival will increase, which will raise prices.
Fourth: Gold risk from cryptocurrencies
Currently, there is much interest in investors regarding cryptocurrencies. However, experts say cryptocurrency is not recognized in most countries of the world, including India. In such a situation, the golden glow does not fade at this time.
How far can gold prices go?
Despite the corona crisis, gold remains an investor-preferred medium and will continue to be bullish in the long term, says Anuj Gupta, vice president (commodity and currency) of IIFL. By Diwali this year, gold could again reach Rs 55,000, he says. Experts are worried about the stock market, according to Gupta. They say gold is associated with the general public and with investors, so that the impact of any kind of ulation hoaxes is minimal.