The Pendulum Of Gold, What Does The Future Hold?

The Pendulum Of Gold, What Does The Future Hold?

In India, Gold is not just an ornament for beautification, but an emotion in itself.

Buying and gifting gold has always been a primary way for Indians to express their love, value and appreciation to loved ones. Gold has been a valuable asset class from times immemorial and for centuries, India has been the largest consumer of gold in the world, currently accounting for a quarter of the world’s total consumption of gold. It has been one of the most preferred asset classes, with Indian households owning more than $1.30 trillion in the form of domestic gold.

India is a diverse, culturally rich country that celebrates numerous festivals, traditions and weddings in a grand way and during these festivities, physical Gold is bought primarily in the form of bullion – coins & bars or jewellery.

Factors Affecting Gold Rates

Many factors affect daily gold rates in a country like India. These can vary from the demand and supply, to global market conditions, economic & geopolitical uncertainty and currency fluctuations in the country. Given the unpredictable global scenarios in the past 2 years due to the ongoing pandemic, Gold has seen the highest inflation in 2020; however, this year it has continued to witness a downward trend as compared to its all-time highs last year.  

What led to the fall in Gold Rates?

In general, gold rates fall when the dollar strengthens against rupee or when equities are robust. Since Gold is a dollar – dominated asset class, it is the US economic trends and inflation in their economy that has caused a major dip in Gold Rates.  Another major reason for US Economic distress is the growing concerns over the new, quickly spreading Delta variant across the nation.

Falling Gold Rates: Jewellers’ Boon or Misery?

The Covid-19 pandemic has hit India’s jewellers hard over the past 2 years. 2020 was a gloomy year, with unpredictability, fear and rallying gold prices crashing the demand for gold overall. This year however, jewellers and bullion dealers are banking on the all-important Indian festive and wedding season to restore some lustre to gold sales as the covid situation & gold prices stabilise, and the economy begins to recover.

Experts believe, that the current purchasing sentiments of Indian consumers is high and will continue to remain so, due to the shift in uncertainty of incomes & jobs, and the current descent in gold rates.

The Ultimate Alternate – Digital Gold

While physical gold in the form of bullion or jewellery is the preferred choice of Indian customers, the new age electronic alternate to invest in gold is Digital Gold, the choice of many millennial Indian consumers.  In a bid to attract more customers to buy gold at a time when prices are volatile, Kundan Gold  has unveiled its very own digital gold platform – MyGoldKart, that allows customers to conveniently buy gold online from as little as Rs.1, and to gradually build up their savings.

 Gold & The Indian Consumer

Falling Gold prices and the upcoming auspicious festivals and wedding season  makes this a perfect time for the Indian consumers to buy gold at lower rates. The current gold price levels at a staggering rate of around 46,500 per 10 gms, are extremely attractive for mid to long-term buyers. The soaring global markets, amendment in global equity & the rising festive demand for buying & gifting gold is reason enough for Indian customers to rush towards Gold this season.

What better way to purchase gold at these amazing prices, than to buy gold coins & gold bars by Kundan Gold – The Pioneers of the Precious Metals Industry.