Price of gold spikes by Rs 375/gram, to rise more: Traders
Due to the Israel war on Palestine, inflation and lack of support for the Federal Gold Interest Rate led to a spike in the price.
Representative image (File)
CHENNAI: Namma Chennai’s favourite yellow metal got costlier this festive season, as gold, which was sold for Rs 5,285/gram two weeks before, was priced at Rs 5,660 on Friday.
And it’s most likely to increase again in the following days, say industry experts.
“Customers are reluctant to purchase gold as the price has increased. It had dipped 2 weeks ago due to the US Funding Bill. Now, there is no profit despite the spike in price, as customers do not have the money to purchase gold, keeping aside other necessities. People purchase gold after meeting all their necessities and it is on their list of priorities,” says C Suresh Kumar, owner of Sri Sumangali Jewellery in Nungambakkam.
Due to the Israel war on Palestine, inflation and lack of support for the Federal Gold Interest Rate led to a spike in the price. “Fluctuations in the gold rate have been due to international issues. Prices will spike again. There is a hike on Monday or Tuesday, but what margin would increase will be known only after that,” points out Jayantilal Challani, president, Jewellers and Diamond Traders Association of Madras.
War has been a major reason affecting the gold price for a long time. If war continues, it would increase the price again. Inflation also affects gold, as when investors look for safe-haven assets. So, during periods of rising inflation, the demand for gold typically increases.
A price hike does not affect purchasing, as consumers buy gold only if it’s necessary. Moreover, buyers are educated about gold investments and know that the value will always appreciate and never depreciate. The rate of silver increases or decreases in proportion with the rate of gold, as both metals have their own value and people do purchase them.
