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The trend of gold price - in INDIA - over the last decade!

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Posted on : 08/Sep/2021 4:08:09 PM



 
 
 
 
Gold investors have gained pretty decent returns in the last 10-years in India.

The factors of a mix of a rally in international prices and a falling rupee has propelled prices, resulting in pretty decent annualized returns to investors.

Here is a look at the historical prices of gold in the last 10-years.

Aspects

Gold has grown almost 10 times in the last 20-years. This is for 24 karats and reflects 10 grams. Here is the data of year wise prices of 24-karats for 10-grams:

YearPrice
2011Rs 26,350
2012Rs 31,025
2013Rs 29,650
2014Rs 28,000
2015Rs 26,400
2016Rs 28,700
2017Rs 26,600
2018Rs 31,400
2019Rs 35,300
2020Rs 48,800
2021Rs 48,850


Observations

For almost 6-years between 2011 and 2017, gold prices barely moved in India. Thereafter, there was some marginal traction, but the real gains were notched in 2020 and 2021, following the discovery of Covid-19 infections. Gold being a safe haven asset, investors took shelter in gold and international prices rallied. In India, gold for 24 karats hit a peak near Rs 54,000 levels, after which there has been some dip.

Last 2 years

The sharp run-up in the last two years has prompted lesser investment physically in the precious metal. In fact, demand for gold in countries like India has reduced considerably. Physical demand over the last 1-year has also been jolted by covid-19 cases. Investors across the globe continue to look to invest in gold ETFs, where there may be reasonable demand going ahead.

The future

With the rally of the last 2-years, it`s unlikely that we will see any solid movement in the precious metal. In fact, our own belief is that there may be a long period of stability in the precious metal. Gold requires a trigger like a geo-political tension or a Covid to spark a rally.

Meanwhile, the global economy is gathering steam, which is good news for equities and not so for gold. At the moment, in the short to medium term, there are no triggers to spark a big rally in the precious metal. In India, the rupee movement against the dollar plays a big role in the movement of gold. If the rupee depreciates against the dollar, it leads to gold prices going higher and vice versa. The government of India in the Union Budget proposals this year announced a cut in import duty of gold. The government announced a cut in customs duty on gold and silver to 7.5% from 12.5%.

Import

India imports bulk of its gold requirements and hence the cut in the duty did make gold prices cheaper. Gold price movement in 2021, 22 karats at the local jewellers` Price

DatePrice
1st January48940
1st February48450
1st March44940
1st April43370
1st May44170
1st June46900


As can be seen in the table above, the sharp fall in gold prices in the month of Feb and March was largely to do with the reduction in import duties of gold.

So, the future!

Since then, gold in the international market has moved higher, which has pushed domestic markets higher.

  • It`s likely that gold would hover in that range of Rs 45,000 to Rs 50,000. Much would depend on gold prices in the global markets, where the movement of inflation in the US and rising bond yields pose a major risk to gold prices.
  • All in all, if you are looking to buy gold, you may do so only on declines, as there may be a little more downside left.
  • If you are looking at consumption related buying, then there is no choice, but to go ahead and buy.
 
Gold Rate in Chennai
 




 




 













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