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The Indian market offers to invest in commodities like Silver and gold beyond the ordinary shares, real estate, and bonds. The commodity markets are stable than the equity and mutual funds. This is a viable option regarding an investment that is safe. The demand for the metal has increased at a rate greater than its production which means that the commodity only appreciates. The price for the asset depends upon various factors and is not determined at MCX. The MCX Silver rates are set by trading activity and a bunch of different other factors.
Silver is among the most traded commodities in the world. India is no exception and silver, along with gold, forms about 10% of all commodities imports to the country. Silver rate in India are directly affected by the global demand and supply scenario of the commodity. Since the 80’s, the demand for silver has outpaced its supply, with industrial demand accounting for more than half the total consumption. More than 80% of total silver production in the world is as by product of other commodities. Exclusive silver mining accounts for only 20% of the global production.
Gold has over the years been a perfect hedge against inflation. Investors are increasingly looking at gold as an important investment. Nobody charges extra for giving you hallmarked gold rate. It is the same rate at which the normal gold is sold. The only difference is that you are ensured of purity when you buy normal gold.
Gold, the precious metal is one of the most sought-after assets during turbulent times. The investment in the precious metal has grown across the globe year on year basis. Since 2001, the metal has witnessed a growth of around 15% every year.
It is important to note that inflation does have a major impact on gold prices in India. For example, when inflation goes higher, so does interest rates. When interest rates go higher, gold prices tend to fall. This is because, people and investors rush to sell gold and buy fixed yielding selling government securities. So, one needs to be careful, when investing in gold. Investors must keep it is a natural hedge, against any decline in prices. If you are investing in large quantities it is better to check with experts especially your local jeweller. However, the important thing that one should note is that what matters to the international gold markets is the interest rates in the US. When these go higher, gold prices in India tend to higher, which is why interest rates assume paramount importance in India. Read more
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