Gold prices are increasing in india - News time 4u

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Tuesday, August 11, 2020

Gold prices are increasing in india

Gold prices are increasing in india

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 gold prices are increasing now before we learned about it from the economic point of view there was first trying to understand why do we value because. Have a look at this periodic table let's see where is gold it is located in PD at 6 and group Levin the symbol used as a U. which stands for autumn if you'll remember the entire periodic table it is divided into 4 blocks S. D. B. N. F.. That means gold is part of the D. group now why do we value gold first of all you need to understand that the reason gold has value is that V. as society have decided that gold should be given currency value and that decision was made based on some reasons since it is a natural resource its availability is limited its extraction process is quite hard and that is why it comes under this ghastly souls in this world if something is rare it naturally becomes expensive another reason is that gold is a valuable and shiny metal you can give it what it was shape and that is why people make jewelry out of it the goal is also stable meaning it is a highly non reactive metal it does not take part in any chemical reaction it never reacts with oxygen which means it will never rust or tarnish it also cannot be dissolved by any single asset you need a mixture of assets to dissolve code but no single acid can dissolve gold
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 it is portable you can heat it easily and then melt it and give whatever shape you want that is hard to release me it is also nontoxic so there are many reasons why B. 2 scored and decided to give it a currency value. Now that you have understood why the value gold it is now time that villain what are the main factors that affect the core rate in India. So there are 5 main factors vivas quickly go through each one of them so that you have a better understanding. The first one is the global market forces C. indeed is one of the largest importers of gold if there is a global increase in the gold prices then naturally India's import price will change and that will be reflected in the prices of gold at home it is true with almost every commodity it is a simple causal effect. The second one is a domain scores of. No central banks of most major countries hold both currencies as well as gold reserves for example the US federal reserve of the United States and reserve bank of India are 2 prime examples of this when central banks of large countries start hoarding gold reserves and procuring more gold the price of gold goes up the reason why the central government keeps a gold itself is that keeping foreign currency reserves is highly unstable for example let's see the RBA decides to keep huge results of dollars and euros if you see the value of these currencies keep fluctuating that means they are an unreliable asset in the exchange market for any government holding a high amount of gold is important the government of respective country can use that gold is self for doing international trade transactions the cost of gold is pretty much the same everywhere of course a little bit depends on the purity level plus if you add a little bit of Boston DH on local customs or commission charges



 the prices closely the same everywhere and the boys and that is why it makes sense for the central government to keep gold reserves instead of foreign currency reserves. Now this kind of investment formula is not only known to the government it is also known to local people and both big and small investors in times of crisis investors globally view gold as a safe option due to country wide lockdown the gold market in India remains shocked that means you and I can not going buy physical gold from the market now the only option that is left is to invest in sovereign gold bonds these are government securities issued in the format of one gram of gold $1 means standards of court that means if you want one to love gold coins you need to buy 10 gold points of one gun each these bonds issued by reserve bank of India on behalf of the government of India and traded on an exchange the only difference between physical gold and silver and gold bond is that when you buy a good bond there's a lot can beat it and a few more conditions regarding owning the interest and the disadvantage of physical gold is its resale value the resale value of 2 entities competitively lower than other forms of code. Anyways as I said you logged on the markets are closed so the only way you and I can invest in gold is by buying gold bones and not physical gold and we all know that investing in gold as a safe option so what happens is that during a crisis the demand for gold increases as you will realize that during a crisis such as locked down your money has no value because your money will get trained due to rising prices investing in properties is also not a good option because during a session on an economic crisis property rates drop that means



 if you want to sell a property you will not get good returns but if you want to buy a property it is a good option because you will get it for less price however during the session if you want to buy a property you need to have stable employment and plenty of savings that is the reason gold is the only good investment and everyone is going to run to buy gold bones so to control the Dimond the government has to increase the price of gold it is basically to discourage people from buying excessive cold bones because the government also needs huge gold reserves so that it can continue to pay for its imports so this is the actual reason why currently in India the gold prices are increasing during this lockdown. The third factor that affects the gold rate is inflation when inflation rises the value of the currency goes down basically inflation means of and prices of goods and services in an economy increases now why does the price of goods and services increases it is because of the increase in demand when the money increases consumers are willing to pay more for the product and that is how the cost of goods and services increases in an economy now if there is an economic crisis recession on lockdown consumers demand for product and services will increase that will push the prices of goods and services in the economy that means the value of currency decreases because now you have to be more money to get that same amount of goods which you previously got for less amount when the value of currency decreases the only safe option is to invest in gold I've already explained why gold is good when the demand for gold increases the price of gold will then shoot up hence we can conclude by saying that with inflation increases prices of gold also increases. The fourth factor that affects the gold rate is the interest rate always remember this point interest rate means the cost of borrowing when banks reduce the interest rates more people are able to borrow more money the result is that consumers will have more money to spend causing the economy to grow and inflation to increase because inflation means price race when you have more money in your hand your consumption increases that means your demonic Griese's when demand increases 



Consumer are willing to pay more for the product and that is how the price of goods and services increases similarly even bank increases the interest rates people will borrow less money that means you will have less money in your hands to spend your consumption decrease that means your demand goes down when demand goes down inflation also decreases I hope so for your able to understand. Now if you have more money in your hand then your demand for gold filling please because we have already seen that gold is a safe option for investment and when the demand for gold increases obviously it's price will also increase so the conclusion is that low interest rate will lead to an increase in called the mind and the for the increase in gold prices similarly when interest rates are high 


customers will borrow less money from the bank they tend to sell gold to acquire cash when customers start to sell gold this increases the supply of gold which leads to reduced rates of cord that means interest rates can also determine the prices of gold. And the last point is during the festive invading season the demand for gold increases always remember when demanding grease is the prices also increase apart from 22 months gold is also used in small quantities by various electronic companies for manufacturing of devices like television computer it's a draw even these requirements have a tremendous influence on domestic demand for gold that means India has to import huge quantities of gold again that's the demonic creases the prices will also increase it is true for domestic as well as international markets so these are some main factors that affect the gold rate in India.

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