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Today’s gold rate across all major cities in India
24 Jan 2021
22 Carat Gold
24 Carat Gold
Chandigarh, a union territory and city is the capital of both Punjab and Haryana and is a prosperous city. This region is known for its fertile land and the agricultural sector is thriving with cash-rich crops. Since it is a major city in North India, the consumption of gold is pretty high. Gold is bought for investment purposes or as jewellery. It is also thought to be a safe investment option as the value of gold does not depreciate. Gold is also considered as good collateral to get loans from banks and considered a good investment.
Purchasing gold during festivals and special occasions is a part of the culture and tradition for the people of Chandigarh. The gold rates in the place vary when there is a rise in demand and that can be seen in festive and wedding seasons. The rates change daily and hence it should be checked before making a purchase.
How is gold measured?
Measurement in gold is quite confusing as the weight of gold is measured in troy ounces while its purity is measured in different ways called ‘%gold’, ‘Karats’, ‘parts fine’, ‘carats’.
Difference between ‘karat’ and ‘carat’?
There is a major confusion in the difference between ‘carat’ and ‘karat’. Though they have the same derivative they are used for different purposes. The ‘carat’ is a measurement of weight for precious stones while the ‘karat’ is used to measure gold. It is also a measure of the ratio of gold present in a sample and pure gold is 24 karats. Thus the ratio of gold present in a sample is mentioned as a number of karats.
Purity of gold
The purity of gold is determined as mentioned below
To know if the gold you purchased is pure or not, a government body called the Bureau of Indian Standards (BIS) certifies the purity. This process of certifying gold purity is called hallmarking and is done to protect the general public against fake gold and to ensure the manufacturers maintain purity and fineness standards.
As per BIS, hallmarked gold jewellery should have the following four components:
Factors affecting gold prices
For Indians purchasing gold is a tradition that continues despite the rising prices. Though people shell out the price quoted, there are a few factors that determine the gold rates:
Lack of supply: There are very few countries that have gold reserves and hence it is a scarce commodity. Unfortunately, India is not among those nations which have gold reserves and hence it has to be imported. The supply of this commodity is not constant and changes and when the supply is less than demand there can be price changes. So the demand-supply is one of the crucial factors in determining rates in India and the same goes for every city in the country including Chandigarh.
Inflation: When there is inflation in the country the purchasing power decreases as there is no money to spend. Gold is long known as a safe investment choice and becomes dearer as the inflation increases. The reason is that people look for options that provide stable returns and there is none better than gold as it is hugely stable. Thus, during inflation the prices of gold increase as it becomes the best and safest investment.
US dollar: The dollar performance in the global market is a great determinant factor in deciding the rate of gold. The reason behind this is that gold is a medium of exchange in trade and the US dollar is the most preferred currency in the world and hence both are closely related. Any changes in the dollar will have an effect on the gold prices directly or indirectly. The impact on gold prices in India is because of the fact that India imports most of the gold and any change in international markets will lead to price changes here.
Change in rate of interest: Any change in the interest rate of financial instruments like bank deposits have an impact on the gold prices. There is an inverse relationship between gold and interest rates. When the interest rate increases, people will sell their gold assets and use that money to invest in products that earn high interest. On the other hand, when there is a fall in interest rate people tend to buy gold using cash in hand thus increasing the demand.
Global relations: There is a great influence on the gold prices when the international relations between global superpowers deteriorates increasing the rates. For example, if the US which is a major global power does not have good relations and has imposed sanctions on a gold-producing country then due to lack of supply, the prices go up. Hence global relations can have an impact on the gold rates.
Indian Rupee vs Dollar: India is among the largest consumer of gold worldwide and since all commodities are traded using US dollars it becomes a determining factor for gold prices as the dollar is converted to the rupee. As the rupee-dollar rate changes so do the domestic gold prices. Also, the rupee has depreciated by close to 8% against the dollar which means that consumers have to pay more.
Jewellery market: Most of the gold that is purchased in India is for the purpose of making jewellery and other ornaments. The jewellery market also plays a great role in determining gold rates. India is a country with many festivals and the jewellery market is flooded with demand during a wedding and festival season as people choose to buy gold in huge numbers. Due to this demand, we can experience a surge in the gold price during this season.
Monsoon: Agriculture is the main occupation of the people in India and most of the income also comes from this. A good monsoon means not only a good harvest for the farmers but also the income derived from it is invested in gold. It is considered as the safest investment option for it serves the dual purpose of using it incase to bail out of a bad monsoon.
Prices of gold keep fluctuating and there are a lot of factors that decide the price of this precious metal.
While buying jewellery it is best to know the reputation of the jeweller so that you know you are not getting cheated. The gold rates in Chandigarh are not the same and have become costly hence it is better to be safe than sorry.
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