Gold, even today, is considered a good investment whether in the form of jewellery or coins. When it comes to buying gold, however, gold jewellery is favoured by many. The unique design and jewellery styles even make it popular among fashion enthusiasts.
2019 has been a great year for people who’ve invested in gold as there has been a great increase, almost 20%, in its price. The beginning of 2020 has been even better with the gold prices reaching the highest in seven years.
Increasing Gold Rates: The Determining Factors
- Economic crisis leads to an increase in demand for gold (Gold is considered a safe-haven)
- Gold reserves being held by central banks
- Higher rates of import duty
- The downfall of Indian Rupee
- The outlook of the global economy is weak
- China-US trade wars
- Increased demand for Indian jewellery designs
All these factors contribute towards the difference in the demand and supply for gold. This leads to an increase in gold prices.
Price Movement Of Gold In January 2020
- The lowest rate recorded for 8 grams of gold is Rs. 29,000 (January 1st 2020) for 22-carat gold.
- The highest rate of gold recorded in January was Rs. 30,400 (January 8th 2020).
- The overall price trends show there has been a steady increase in the price of gold compared to the previous year.
Given below are the recent price charts
Gold Rate Chart (3rd Feb 2020 to 11th Feb 2020)
Price For 22 Carats (8Grams)
Price for 22 Carats (1 Gram)
|February 1st||Rs. 30,400||Rs. 3,800|
|February 2nd||Rs. 30,400||Rs. 3,800|
|February 3rd||Rs. 30,400||Rs. 3,800|
|February 4th||Rs. 30,160||Rs. 3,770|
|February 5th||Rs. 29,920||Rs. 3,740|
|February 6th||Rs. 29,920||Rs. 3,740|
|February 7th||Rs. 30,160||Rs. 3,770|
|February 8th||Rs. 30,280||Rs. 3,785|
|February 9th||Rs. 30,280||Rs. 3,785|
|February 10th||Rs. 30,160||Rs. 3,770|
- The above chart shows the rate of 22 carat gold (for 8 grams and 1 gram respectively) for the past 10 days.
- The highest rate was recorded on the 1st, 2nd and 3rd of February 2020 with Rs. 3800 for a gram of 22-carat gold.
- As of yesterday (February 10, 2020) the rates have come down to 3,770 per gram of gold.
- The gold price is expected to go down in the coming days.
- It’s better that you wait for a while if you have plans to invest.
Given below are some of the major advantages and disadvantages of investing in gold
- Hedge against financial risks and inflation.
- High liquidity – Gold can be easily converted into cash when required.
- High demand for gold in the international markets.
- Long-term investment as the inherent value is not affected much.
- Storing gold is difficult. Gold jewellery and gold coins have a great value and hence has to be stored carefully in a bank vault. This means you’ll have to pay regular maintenance charges for storage.
- Gold is not a passive investment like bonds or stocks hence do not earn income in the form of dividends or interests.
- Gold jewellery charges vary based on the jewellery style (making charges). However, when you sell it you’ll only get the rate of gold used in creating the jewellery.
Gold jewellery is considered as a statement of fashion as well as a symbol of wealth and prosperity in our country. Gold as an investment will prove to be the most beneficial while facing a financial crisis. So invest in gold now even though the price is on the higher side.
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