There are several major reasons why gold has become expensiv
There are several major reasons why gold has become expensive in India. In recent years, its prices have increased rapidly. The main reasons are:
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1️⃣ Rise in International Prices
Gold prices are determined in the global market in US dollars. When uncertainty increases around the world—such as wars, economic recession, or banking crises—investors consider gold a “safe investment” and start buying it.
For example, interest rates and economic indicators in the United States directly affect global gold prices.
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2️⃣ Weakness of the Indian Rupee Against the Dollar
If the Indian rupee weakens against the US dollar, imported gold becomes more expensive for India.
This is because India imports most of its gold from other countries.
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3️⃣ Import Duty
The Indian government imposes import duty on gold. When this duty increases, gold becomes more expensive in the domestic market.
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4️⃣ Global Crisis and Geopolitical Tensions
For example, after the Russia-Ukraine War, instability increased in the global market, which raised the demand for gold and pushed prices higher.
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5️⃣ High Demand in India
In India, gold is not just an investment but also an important part of tradition and weddings.
During festive seasons (such as Diwali and Akshaya Tritiya) and the wedding season, demand increases, putting upward pressure on prices.
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6️⃣ Central Bank Purchases
Many central banks around the world (such as India’s RBI) are increasing their gold reserves, which raises global demand and prices.
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Conclusion
👉 Global uncertainty Weak rupee Import duty High domestic demand = High gold prices
Comments
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