The reduction in the price of gold around Indian cities has caught the eyes of many Investors. The reduction amount has also affected the overall interest rate in the last 24 hours. Buyers have experienced a striking fall around Rs 4500-5333 which varies between cities.
As observed in the last 24 hours, the gold rates of Indian metro cities have been decreasing.
According to the fluctuations, Gold prices in Chennai have dropped from 24 carats (10 grams) is Rs 51,285 while the 22 carat (10 grams) is Rs 47,927. In the national capital Delhi, the Gold rate for 24 carats (10 grams) is Rs 52,140 while 22 carats (10 grams) is Rs 47,800. The rate of Gold for 24 carats (10 grams) in Kolkata is Rs 51,980 while 22 carats (10 grams) is Rs 47,650. On the other hand, the price of 24-carat gold (10 grams) in Mumbai is Rs 52,980 while 22-carat gold (10 grams) is Rs 47,650.
This is a graph representing the prices of gold in India:
What could be the reasons causing a fall in the prices of gold?
Central banks of most major countries hold both currencies as well as gold reserves. The US Federal Reserve of the US and Reserve Bank of India are two important examples of this. When central banks of developed countries start holding gold reserves and procuring more gold, the price of gold goes up. This is because the flow of cash in the market is increased while the supply of gold goes down.
Interest rates on financial products and services are tied closely with the demand for gold. Current gold prices are generally good indicators of the interest rate trends of any country. With increased rates of interest, customers tend to sell gold to acquire cash and as such an increased supply of gold leads to reduced rates of the metal. Alternatively, higher interest rates translate to less cash in the hands of customers and as such lower demand for gold and thereby decreasing the price of the metal.
