Gold rate in Delhi

Delhi is the capital city of India. Boasting historical monuments such as India Gate, Qutub Minar, and Red Fort, along with the seat of the supreme legislative body, the Sansad Bhavan, this city is one of the major business hubs in the country.

Gold purchases in the city are at their peak during festivals and the wedding season. The gold rates in this city differ from other cities in India due to different state taxes, transportation costs, and making charges that jewellers levy. In addition, the central bank policies, local factors and geopolitical situations impact the gold prices in the city.

Factors that Impact Gold Rates in Delhi

The significant factors that impact the gold rates in Delhi include currency conversion rate, geopolitical concerns, and local factors. Let us have a look at each of these factors below:

Currency conversion rate

If gold is imported from other countries, the currency conversion rate matters as gold is traded in the U.S. dollar in the international market. So, the currency conversion rate between the U.S. dollar and the Indian rupee considerably impacts the gold rates in Delhi. If the price of the Indian rupee drops against the U.S. dollar, the gold prices in Delhi will increase.

Geopolitical tensions

Another factor impacting gold prices is geopolitical tension. Gold prices fluctuate continuously if there is a war or territorial conflict between two countries. These fluctuations lead to an increase in investment in the yellow metal. As the demand increases, the prices will increase.

Local market conditions

Another factor that affects the gold rate in Delhi is the local market conditions. The making charges by local jewellers, state taxes, and transportation charges are some of the local market factors that impact the overall gold price.Also, transportation costs impact the gold rates if gold is transported from other regions of India. If petrol prices increase in the country, transportation costs go up, and gold prices go slightly up.

How Does GST Impact Gold Rates in Delhi?

Prior to the Goods and Services Tax (GST) introduction, gold was taxed at12.2%, which included an import duty of 10%, value-added tax (VAT) of 1.2%, and customs duty of 1%. Following GST implementation, import duty remained while customs duty and VAT were eliminated, and the government introduced a GST of 3%. So, the introduction of GST increased the prices of gold across the country and Delhi as well.

Gold Schemes to Invest in Delhi

Though investment in physical gold is one of the best ways to invest, there are concerns related to its storage and security. If these concerns restrain you from owning a massive quantity of gold, you can consider the following gold investment schemes in Delhi.  

Gold exchange-traded funds (ETFs)

Investing in gold ETFs is like owning gold in an electronic form. Like investing in stocks, you can invest in any of the gold ETFs. These funds track the prices of gold in domestic markets and provide returns on your investment. They are listed on the Bombay Stock Exchange Ltd. (BSE) and the National Stock Exchange of India (NSE). You can purchase and sell gold ETFs at any time by tracking changes in the gold price in the market. This provides flexibility in investments and frees you up from any lock-in period.

Sovereign gold bonds

Sovereign gold bonds are debt bonds or securities issued by the Reserve Bank of India on behalf of the Government of India. By purchasing a sovereign gold bond, you own gold in a dematerialised form. These bonds are issued on a per-gram basis. The minimum investment is one gram, and the maximum is four kilograms if you are an individual investor. Per RBI guidelines. the investment tenure is eight years, and the interest rate is fixed at 2.5% per and credited semi-annually to your bank account. Premature withdrawals are allowed after five years from the date of issue. Moreover, you can use the bond as collateral against loans.

Gold funds

Open-ended gold funds invest in shares of a gold exchange-traded fund (ETF). The main goal of gold funds is to build wealth by utilising the potential of gold as a commodity. Investors who want exposure to gold should use it. Instead of holding the commodity wisely, it is more convenient to invest in gold through gold funds.