Gold Prices might Remain Weak in India in August: Good Buy For Investors

Gold Prices might Remain Weak in India in August: Good Buy For Investors
The month of August is witnessing the lowest gold price in India in the last 4 months. This has waked some questions regarding the precious metal. Gold has always been considered to be a safe haven for the investors in long term. The last year proved gold to be a huge money-maker to take the rate at its historical peak level for a sustained time. Now as the prices are going down again, it is giving hope to the investors to put money in gold.

Gold prices in India have been static on 11th August from yesterday at Rs. 4528 for 22 carat gold and Rs. 4628 for 24 carat gold. Most of the gold jewelry is made with 22 carat gold because of its better durability. In addition to that price, gold jewelry consists making charges and GST.

Gold price fluctuation chart in India

In India, prices started to fall on a daily basis since 31st July this year. August has seen a consistent fall in the prices. Only on 5th August prices saw Rs. 20 hike than its earlier day in 10 grams gold. Other than that period the gold prices fell sharply. The next day on 6th August the prices went Rs. 270 down in 10 grams gold. On 7th August it was the most sink in prices till now at Rs. 1000 per 10 grams gold. The last two days also showed a similar trend of falling prices or being static.

Major Indian cities like Bangalore, Mumbai, Kolkata, Delhi also given a prospect of a similar trend. In Bangalore, the price for 22 carat gold is Rs. 43350, in Mumbai, it is Rs. 45280, in Kolkata, is watching one of the highest prices at Rs. 45700 and in Delhi, it is selling at Rs. 45500. In most of the cities on 7th August, the gold prices fell around Rs. 1000 per 10 grams. Since then gold rates did not give any sign to be up. On 30th and 31st July, the prices went highest in recent times at Rs. 47380 for 10 grams 22 carat gold.

Why did the rates go down-field?

RBI's recent MPC report in the first week of August suddenly helped the gold rates sink Rs. 1000 per 10 grams. The MPC decided to keep the repo rate low at 4% and the reverse repo rate at 3.5%. No hike in interest rates has been indicated. So, the government did not sound to give better profit through Govt. bonds soon. This kept gold prices in India calm. But as the employment and wages data was out by the labor department in the USA, it showed that the country's economy is getting better momentum. This triggered the investors to think that the Fed Reserve might taper the stimulus further that earlier helped gold to reach higher in 2020. Investors started to fear that the commodities might lose profitability than the Govt. bonds. This plunged the international gold prices downward immediately, impacting Indian gold rates negatively.

A sinking gold rate always creates ground for the investors to put more money in the yellow metal. Additionally, the recently issued sovereign gold bond scheme - V by the RBI is also giving one more opportunity to invest in gold now, at lower prices. No further economic development can keep the gold prices low in August in India.