Top Factors Affecting Gold Price in India

Gold is a precious metal with which mankind has had a long and illustrious relation and continues to do so. Price of gold is determined by different factors such as season, world market, inflation, demand and supply etc. Price of gold coins are generally higher because of the high price rises. There are many factors that influence the price of 24 karats gold in India, and before we discuss about it, let us clarify the difference between "value" and "price" of gold coin. The price is the amount of money you pay when you buy a coin. On the other hand, value is the money you get when you sell it.

Seasonality: Prices of gold coins depend on the season. Usually, they are high during November - December and during the spring season. For the period of festivals such as Diwali, Akshaya Tritiya, Ramzan etc., most of the jewelry stores offer sales and discounts. It is the best time to invest in gold as you get high discounts on the price tag.

Bad Economic Climate: Economic crisis will increase the price of gold, while a stabilized situation could steady the price of gold as well. The cost of gold is greatly influenced by other market factors also.

Demand and Supply: With its huge tradition and culture of buying and saving gold, India is responsible for 27% of the demand for gold in the world. Countries such as Brazil and China are entering into the gold market. As the demand for this precious metal increases, its price also increases proportionately.

Inflation: In India price of gold coins are greatly swayed by inflation. Gold is thought to be an inflation hedge. So, when inflation increases more and more, people try to lock their money in gold. This demand for gold in turn increases its price. If the inflation decreases, gold prices will reduce proportionately.