Gold, the timeless precious metal of all time, has seen quite a journey over the past year.
Only 12 months ago, the rate of 24-carat yellow metal was around Rs 58,000 per 10 grams in India.
But as of today (October 25), it is trading at Rs 7,963.3 per gram, although a drop considering the previous day but a huge rally in seen over the months value.
In today's trading, the 22-carat gold, which is mostly preferred for jewellery, is down to Rs 7,301.3 per gram, sliding by Rs 570 in a single day.
In cities like Mumbai, for example, the gold rate today is Rs 79,487 per 10 grams slightly down from yesterday's Rs 79,657.
Let's take a look at the factors driving these fluctuations in the gold market, and how is it affecting the jewellery stocks in India.
The Economic Twists Driving Gold Prices
The global economic landscape has a major role when it comes to the gold's value in India. From the currency exchange rates to the central bank policies, there are several factors that play a crucial role in keeping the yellow metal prices moving.
For instance, the dollar's recent weakening against the major global currencies has been one of the big drivers, coupled with the high inflation rates, marking gold as an attractive investments.
Apart from this, the central bank worldwide are bolstering their reserves, buying gold as a safe asset amid mounting debt levels and economic uncertainties. The demand from both jewellers and investors alike has added fuel to the gold market’s recent activity.
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Jewellery Stocks Under Pressure Amid Price Drop
Today’s dip in gold prices also took a toll on India’s major jewellery stocks. The market saw a decline across the sector, with some notable players experiencing steep drops.
1.Kalyan Jewellers India fell by 3.27 per cent, bringing its shares to Rs 673.35 at 12:56 pm IST during the intraday trading session on NSE.
2. PC Jeweller saw a sharper fall of 5.00 per cent, trading at Rs 142.29 apiece.
3. P N Gadgil Jewellers wasn’t immune, slipping to Rs 700.00, a drop of 1.12 per cent during the intraday trading session.
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4. Senco Gold recorded a 3.17 per cent decrease, bringing its stock to Rs 1,214.30 apiece during the trading hours.
5. Tribhovandas Bhimji Zaveri saw one of the biggest declines, with shares tumbling by 6.09 per cent to Rs 255.95 at 12:56 pm IST.
While it is challenging to predict if prices of this precious yellow metal will rebound or continue to soften, the forces pushing gold’s popularity like a weak dollar, inflation concerns, and central bank stockpiling remain strong.
As always, gold remains a fascinating, if unpredictable, metal mirroring the world’s economic ups and downs.