Gold Price Rises to ₹80,000 Global and Domestic Factors Involved
Here’s an explanation for the hike in gold price can be influenced by a combination of Global & Domestic factors
- Global Economic Uncertainty: In Indian households, gold preferably seems a haven during the economic crisis. Events like geopolitical tensions, economic downturns, or instability in major economies lead investors towards gold, driving up demand and prices.
- Inflation Concerns: High inflation depreciates the purchasing power of currencies and makes gold appealing as a means of maintaining value. If inflation rates are high, investors buy more gold and hike the prices.
- Currency Depreciation: Depreciation of the Rupee against the Dollar can have a significant impact on gold prices in India. This is because gold is internationally traded in dollars, hence a weaker rupee will result in gold becoming more expensive in the domestic market for Indian buyers.
- Central Bank Policies: Increasing gold reserves in the Central Bank can also drive demand. Lower interest rates reduce the opportunity cost of holding nonyielding assets such as gold, making it more palatable.
- Supply Chain and Mining Problems: Limited production of gold as well as supply chain disruptions all create a perfect storm of supply and demand to raise prices quickly.
- Rising Demand: Rising demand in conjunction with the festive season and wedding season in India, and rising demand from countries such as China, may cause gold prices to rise.
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