Gold rate in Kakinada

Kakinada is the sixth-largest city in Andhra Pradesh. It is famous for its local food and well-planned infrastructure. The city is also home to many Telugu cinema celebrities and used to have many cinema theatres. Kakinada is known for its sweets, such as Kaja, which has become a famous recipe in South India.

Kakinada is an essential political region and also one of the three smart cities of Andhra Pradesh under India's Smart Cities Mission.

Gold is a valuable asset across all regions of India. The city of Kakinada is no exception when it comes to buying gold. Like other regions in India, Kakinada has a healthy demand for gold, especially during festivals and auspicious occasions. Many people choose gold as a preferred addition to their investment portfolio.

Let us look at the gold rates in Kakinada.

Factors Affecting Gold Prices in Kakinada

• Value of Indian Rupee: The price of gold increases when the value of the rupee falls against the US dollar. Hence, any direct or indirect changes to the US dollar can affect the gold rates in Kakinada.
• Demand and Supply: The price of gold increases with the rise in demand for this precious metal. During festivals, weddings, and other auspicious occasions in India, the gold rate in Kakinada surges as the demand for gold in all forms is high during these times.
• Inflation: When inflation increases, people often buy gold as a kind of security, which increases its price. Additionally, as inflation increases, the value of the rupee declines on the global market, which increases the conversion rate and, consequently, the price.
• Taxes and Duties: Customs duties are imposed on shipments of gold imported to India. So, the market price of gold is directly impacted when changes in government laws result in a hike in import duties. Additionally, depending on the region, distribution costs and local taxes also affect the price of gold.

Impact of GST and QE on Gold Rates

The Goods and Services Tax (GST) has contributed to the rise in gold rates. Before the implementation of GST, jewellers had to pay a 10% customs tax, 1% excise duty and 1.2% value-added tax (VAT). However, the import duty on gold including Agriculture Infrastructure and Development Cess (AIDC) has increased to 15%. Additionally, you have to pay a GST rate of 3% on all gold purchases.

Quantitative Easing (QE) is a monetary strategy employed by central banks of countries. In QE, a central bank buys securities to reduce interest rates, increase the supply of money, and drive more lending to businesses. The goal of QE is to encourage economic activity during financial crises. QE can also impact the gold market. Whenever the authorities hint at using QE to scale back gold purchases, the prices of gold can rise overnight.

Gold Investments in Kakinada

Gold is one of the most preferred investment choices in India. Besides buying physical gold, there are many investment alternatives for gold available. Gold jewellery is the most popular form of gold that people purchase from a store. The other investment choices are:

• Gold coins and bars: In addition to traditional currency, gold coins are used as a form of wealth storage. A gold bar is a rectangular piece of gold, sometimes also called a gold biscuit, that is primarily used for saving purposes.
• Gold Exchange Traded Funds (ETFs): These investments reflect actual gold, which may be in a document or a dematerialised state. They are a great investment option if you want to diversify your portfolio or find it difficult to purchase real gold. Opening a Demat and trading account is all that is necessary to buy ETFs from the stock exchange. 1 gold ETF unit = 1 gram of gold.
• Gold Mutual Funds: A gold fund is a mutual fund or a variant of ETF that primarily invests in gold bullion or businesses that produce gold.
• Sovereign Gold Bonds (SGBs): SGBs are treasury bonds that are valued in grams of gold. They serve as alternatives to holding actual gold. You have to pay the issue price in cash, and the bonds can be redeemed for cash upon maturity.