India is a top consumer of gold when compared to other countries. It accounts for a quarter percent of the world’s total consumption. But the country does not produce gold. As the gold rate is increasing over the years so, most investors consider gold as a good investment option.

How is the Gold Rate determined?

The London bullion association decides the gold price in the international market. In India, several members play a vital role in fixing the gold rate. They are

  • Jewelry associations
  • Indian Bullion Jewelers Association
  • Banks
  • Private companies

How is the live price of gold determined?

The live price of gold keeps on changing for a second. Why does the price of gold change? It is unpredictable, as it depends on several factors. All these factors either increase the price of gold up or down within seconds. Investors should understand the factors that make changes in the live price of gold. When they get the right point, they can make the right decisions. Several factors that change the live price of gold include

  • Federal Reserve interest rates
  • Job and Wage reports
  • Inflation
  • S Dollar losing value

Why Should I Pay Attention to the Live Price of Gold?

Paying attention to the live price of gold helps the investor to make investments at the right time. The price of gold stays stable for a certain time. So, investors can make use of this gold as a better investment option. Gold is a safe investment and a long-term option. It is difficult to make decisions over the purchase of gold without analyzing the live price of gold.

Factors Affecting Gold Price in India:

Some of the factors that affect the gold price in India are as follows:

  1. Import costs: When the import costs of gold increases, it will increase the gold rate.
  2. Interest rates on bank fixed deposits: Bank fixed deposits are one of the best investment options. Most people prefer to open fixed deposits in banks. But when the FD interest rates fall, investors prefer gold as an investment option. This leads to the demand for gold and thus, increases the gold rate.
  3. Strength of the US dollar: If the US dollar reduces, gold rates will increase in India. If the US dollar increases, the gold rate will fall in India.
  4. Global economic stability:  The gold rate may increase when there is a time of economic instability. During economically unstable conditions, people tend to consider gold as a safer investment option. This increases the demand for gold, and thus increases the price.
  5. Inflation: When inflation faces an upward trend, then gold prices will tend to increase significantly.

Why gold rate fluctuates in India?

There are a lot of factors that cause gold rates to fluctuate in India. Some of them include

  • Demand-Supply equation
  • Global production cost
  • Industrial uses
  • Rupee-dollar equation
  • Global crisis
  • Inflation rate
  • Interest rate

How Purity of gold is measured?

Karat is the unit used to measure the purity of gold. One can spell the same as Carat. One Karat is 1/24 part or 4.1667 percentage of the whole gold alloy. So, the Karat expresses the number of parts of gold in a whole gold alloy. For instance, if the object contains 16 parts gold and 8 parts metal, then it is a 16-Karat gold. Thus, for 24-Karat gold, it contains all parts as pure gold.

What are the different purity levels in gold?

People buy gold after determining its weight and purity. Such purity in a unit is called Karat. The different purity levels of gold include

  1. 24 Karat
  2. 22 Karat
  3. 18 Karat

For investment, people consider 24 Karat gold. For making jewelry and ornaments, manufacturers use 22 Karat and 18 Karat gold.  22 Karat means there is a mixture of both gold and other alloys. It will be in the ratio 11:1. So, the 1 gram of 22 Karat gold contains 91.5% pure gold. The remaining portion includes other metals.

18 Karat means there is a mixture of both gold and metals in a 3:1 ratio. So, the 1 gram of 18 Karat gold contains 75% pure gold. The remaining 25% includes other metals. Other purity levels of gold include

  • 14 Karat (58% gold)
  • 10 Karat (42% gold)
  • 6 Karat (25% gold)

 How is Gold used in Electronics?

To manufacture electronic goods, manufacturers use gold a lot these days. The reason for using gold in such electronic goods is the properties of gold. Gold is resistant to corrosion. Most low-voltage electronic devices use gold as a major material.

Some of the electronic devices that use gold in them include

  • Cell phones
  • Television
  • Calculators
  • Personal Digital Assistants
  • Global Positioning System Units

 Why should I invest in Gold?

There are some reasons for you to invest in gold. They are:

  • Most investors consider gold as a safer investment option than other investments. Gold performs well against inflation of the currency.
  • In the case of a financial emergency, one can use physical gold to get immediate cash. One can get a gold loan in many banks.
  • Gold retains its value both in financial uncertainty and geopolitical uncertainty.

How to buy Gold?

Buying gold depends on the form you opt for.

Gold coins

One can buy gold like gold coins. Buy gold coins from banks, jewelers, e-commerce websites, etc.

Jewelry

One can buy physical gold from a jewelry shop or e-commerce website.

How to sell gold?

One can sell gold coins or jewelry to the reputed jewelry shop. Make sure that you take your bill with you to get cash for gold. The amount that you get depends on the worth and purity of gold.

How to check the purity of gold?

When you are buying gold jewelry, you should check for the BIS hallmark. This hallmark confirms that gold meets national and international standards. Some of the components that you should look at the buying time:

  • BIS mark

24K= 99.9% Pure

23K= 95.8% Pure

22K= 91.6% Pure

18K= 75%

  • Purity in Karat
  • Hallmark number or identification symbol

Conclusion

Gold is a precious metal and a safer investment option than others. With the rise of the gold rate, it is better to buy gold as coins or bars. When you have a good savings of gold, you can manage your financial conditions in the future.