18K Gold Rate Today in India

You can purchase gold in India through jewellers, banks, etc. The gold rates in India are affected by factors like inflation, fluctuations in gold prices globally and the Central Gold Reserve. Gold is purchased in India primarily as ornaments and jewellery. Further, it is also traded as a commodity on exchanges like the National Commodity and Derivatives Exchange (NCDEX), the Multi Commodity Exchange (MCX) and the National Spot Exchange (NSEL).

If you are planning to buy gold in India, it is crucial to understand the current prices first. So, to make your purchase decision easier, let us explore the gold prices inIndia today, and understand how these prices are determined and by whom.

What is the Purity of 18k gold?

18k gold consists of 75% gold and 25% alloy metals. This means that for every 18 grams of 18k gold, 13.5 grams are gold, while the remaining 4.5 grams consist of other metals like copper, silver or nickel. People often choose 18k gold for their jewellery because it balances durability and affordability.

Factors That Impact Gold Prices in India

Supply and Demand

Gold is a natural resource mined from the earth's reserves. Hence, gold prices in India largely depend on the supply. If there is a lesser supply of gold, gold prices may decrease.

On the other hand, the demand for gold increases during festivals or when the people of India buy gold to hedge against a bearish market. In such times, the higher demand causes gold prices in India to rise.

Import Rates

Once upon a time, India had adequate gold reserves. But the situation has changed now; Most of the gold we buy today is imported in its natural form. Hence, import rates are a vital factor in determining gold prices in India. Higher import rates could mean a higher gold price and vice-versa.

U.S Dollar

Gold is an internationally traded commodity. Most countries, including India, buy gold in the U.S. currency. This means the value of the U.S. dollar has a direct or indirect impact on gold prices. In India, the relation could be inversely proportional; when the dollar is weak, India could buy gold at a lower price. Hence, the strength of U.S dollars also affects gold prices in India.

International Relations

When the relationship between two countries is affected, it could halt or negatively impact the smoother import and export of gold. This, in turn, may spike the gold rates.

Indian jewellery market

We need to understand the relationship between gold prices and the Indian jewellery market, owing to Indian cultural beliefs. In India, gold plays a crucial role in household life, especially during the festive season and wedding season. As a result of the higher demand for gold during the festive season, gold prices go up as a result. According to a report released in 2019 by the World Gold Council (WGC), Indian households own around 25,000 tonnes of gold, which makes them the world's largest gold collectors.

Who Decides the Gold Rates in India?

The IBJA (The Indian Bullion Jewellers Association) plays a vital role in determining the daily gold rates in India. IBJA consists of the country's most prominent gold dealers. They account for the lion’s share of gold that is sold and bought in the country and hence, has the power to determine the gold price across the country.

Banks are the largest importers of gold in the country. However, they add a fee to the imported gold before selling it to a supplier, increasing the purchase price at the source. By the time it reaches you, the price you pay for gold includes various charges. For instance, when you buy gold jewellery, you may also need to pay a making price.

Gold vs. FD

Both gold and fixed deposits are popular investment instruments. However, both share some differences, too. To begin with, returns from FD are guaranteed and fixed. Market fluctuations or economic conditions don’t affect your interest income.

On the other hand, gold rates can fluctuate. This is because gold rates get decided daily. They could go up or down based on economic conditions. But per historical trends, gold rates have always gone up in the longer term.