HomeBusinessWhy are gold prices increasing?

Why are gold prices increasing?

Gold prices are constantly increasing. And now even experts believe that we do not even know how much gold prices are going to increase. But the rise in gold prices is not a good sign for the economy. Because it is believed that people buy gold only when there is a crisis.

But for countries like India it is a different thing. Gold is purchased in India even when it is a common day. Here gold is consumed the most in jewelry. And it is believed that India imports as much gold. 60% of it is used as jewelry.

Why are gold prices increasing?

gold price
gold price

Gold prices are increasing continuously. And now it has gone above ₹ 52000 per 10 grams. In such a situation, it has become difficult for the experts to estimate, how much more will the price of gold increase? It is generally believed that gold prices rise only when the crisis comes.

Coronavirus has also influenced gold prices much more.

In countries like India, the price of gold is also increasing because a large number of people have lost their jobs here. And now we want to secure my future. In such a situation, people are running towards gold. And viewing your investment as safe as gold.

Talking about 4 months ago, the price of gold was around ₹ 42000 per 10 grams. Which has now increased to more than ₹ 52000. The same experts believe that the price of gold may increase even more for the next 6 to 8 months. And this will be the first time when the price of gold can go above ₹ 60000 per 10 grams. At the same time, the price of silver continues to rise.

Corona virus affected gold prices

One reason for the rise in gold prices is the corona virus. People have lost their jobs due to corona virus. And right now we are looking at our investment as gold. Whenever there is a recession in the world, or there is a crisis, people rush to sleep. And invest in gold.

By the way, if we talk about people’s choice as an investment, then people invest money in the form of stock market equity fund fixed deposits and homes. But when it comes to the crisis, the first choice becomes the gold of the people. And this thinking of the people has also affected the prices of gold.

When there are common days, this investment is split into different parts. And the price of gold remains constant. But in the time of crisis, all the people start investing in gold. And the price of gold goes up.

In countries like India where people save from the beginning. He is not ready to spend his savings. And want to invest their money in some place where they can get better returns in future. And at least be able to secure your investment.

In such a situation, people are looking at gold as a safe investment. Not spending money by people is also not good for the economy. This causes a drop in demand, and the economy goes down even further. In such a situation, the pressure on the government also increases. However, people’s investment becomes safe. But even higher gold prices can prove to be a loss deal. Because later when people sell gold together, the price of gold falls drastically.

Banks around the world are buying gold

This is not why gold prices have increased due to the corona virus. Rather, banks around the world are also buying gold. Which includes big banks like Bank of China, Reserve Bank of India and US Federal Bank. Apart from this, the European bank has also bought large quantities of gold.

Buying of gold by banks increases the credibility of that country. And they can print large amounts of notes. In view of this, banks have imported large quantities of gold. And has deposited gold in its reserve. Due to this, the prices of gold have increased considerably.

Looking at the recent months, Indian banks have bought about 600 tonnes of gold. Due to this also, the price of gold in the Indian market has increased significantly.

How to invest in gold in India

People in India have been investing in gold for a long time. If we talk about buying gold in India, then India imports 700 to 800 tons of gold from abroad every year. In this, 60% of people deposit gold in the form of jewelry. While 30% of people buy gold to invest in gold. Apart from this, 10% people also use gold for offering in the temple etc.

In such a situation, you can guess that India is a big gold importing country. According to a recently released report, India was the world’s largest gold importer. Recently, China has overtaken China in the matter of importing gold. Whereas India produces 1 ton of gold on its own.

However, much of the gold is produced in India as compared to imports. In such a situation, if India has to reduce investment in gold, then import duty can be increased on it. In such a situation, gold will become more expensive and people may become disillusioned by investing in gold. And start spending your money in that market.

But if the corona virus has increased more, then in the coming days people can invest in gold by removing the stock market and money. Experts are expecting more gold prices to rise in 8 months.

Indians hold world’s largest gold stock

You would know that the US has the world’s largest reserve stock in the form of gold. But do you know that you guys have the world’s largest gold reserve with Indians?

According to an estimate, there are about 25000 tonnes of gold lying in bank locker and shelves of people’s homes in India. Out of these, 12000 tonnes are lying with rich people. Now, let’s talk about how the rise in gold prices will affect the economy. You must know that India is the world’s largest importer of gold. In such a situation, the Indian economy remains a continuous deficit economy. And if the import of gold will increase more in the coming days, then the gap between import and export in India will increase further. And India’s trade deficit may increase even more.

We can use gold in the economy by making gold bank

Apart from this, Indians have 25000 tonnes of gold. The Indian government can use it for anything in the economy. For this, the Government of India will have to create a gold bank.

And people have to pay interest on it. With this, Indian people will be able to deposit gold in banks. And they will also get interest on it. In such a situation, there is also a benefit deal for the people. At the same time, the Gold Reserve will be deposited with the Government of India. So that he will be able to print a large amount of notes. At the same time, we will be able to move the economy at a much faster pace.

Apart from this, loans can also be given to people. If a person takes around ₹ 100000 then it will cost money in the economy. A large number of people fear that if they disclose their gold they will have to face the Income Tax Department.

The government has to overcome the fear of the people. And after that a gold monetization policy has to be brought. Gold monetization policy is in force in India. But it is not able to show anything amazing on the ground. Recently, the Central Government has also refused to give the GST money from this to the states. The Central Government says that it does not have the money to give to the states. In such a situation, you can understand the crisis of India’s economy.



Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Recent Comments