Gold is a global commodity, which is bought and sold all over the world. Demand and supply have a great impact on its global prices. London and New York are the largest gold trading centers in the world. Gold production in India is very less. India imports a large part of its gold requirement. This means that fluctuations in gold prices in the international market have a direct impact on its prices in India. The question is, how much is the impact?
Other things also affect gold prices in India
Experts say that in the international market gold Fluctuations in prices affect its prices in India also. But, it takes some time. The reason for this is that the prices of gold in India are affected by import duty, tax and also the value of rupee against the dollar. Due to weakness in the dollar, buying gold in other currencies including rupee becomes cheaper. Similarly, when the dollar strengthens, buying gold in other currencies becomes expensive.
Gold shines as uncertainty increases in the world
Gold prices increase when there is uncertainty or inflation in the world. The reason for this is that gold is used for hedging. This means that it is the safest asset to invest. When the economy becomes stable and interest rates increase, gold prices fall as investors start investing in higher yielding instruments. Geopolitical tension and America’s tariff policy have a major role in the rapid rise in gold prices this year.
Gold units are different in India and international markets
India fulfills 80 percent of its gold requirement through imports. Because of this, gold prices in India are affected by its international prices. Experts say that since India is one of the largest importers of gold in the world, the demand for gold in India affects the international prices of gold. But, while in India the price of gold is per gram, in the international market it is in ounces. One ounce is approximately 28 grams. That is why there is a huge difference between the international price of gold and the domestic price.
Gold price will increase by 61 percent in 2025
The rising trend in gold prices continued on October 16 also. There was a rise in gold prices both in the country and abroad. Spot gold rose 0.6 percent to $4,233.39 an ounce. This is the fifth consecutive day of rise in gold. In India, gold futures in MCX were trading at Rs 1,28,010 per 10 grams with a rise of Rs 800, or 0.63 per cent, at 2:29 pm. Gold has so far risen 61 percent in 2025.