Gold prices continue to fluctuate owing to a combination of international and domestic factors. Currently, in India—particularly West Bengal—gold prices are increasing. This is why:
Global Market Trends – The world price of gold is a big factor. If gold rises in America or Europe, India also experiences a price rise. Currently, with inflationary fears and economic uncertainty, investors are flocking to purchase gold, driving prices upwards.
Dollar vs. Rupee Exchange Rate – As gold is traded everywhere in the world in U.S. dollars, if the rupee depreciates against the dollar, gold would automatically be dearer in India. Recently, the rupee has been relatively weak, and that has also added to price increases.
Import Duty & Tax – India receives most of its imports in gold, thus any increase in import duty will directly affect the price. The government occasionally adjusts these duties, and this leads to shock price increases.
India’s Sustained High Demand – Festivals, weddings, and traditional investments always lead to increased demand. With the wedding season ongoing, demand is high, and so is the price.
Stock Market Volatility – Whenever the stock market is volatile, individuals opt for gold as a more secure investment. Currently, with international tensions and economic downturns, individuals are investing in gold, and that drives up its price.