HOW TO LEARN THE REASON WHY GOLD PRICES ARE UP 20% IN INDIA

Gold Prices have experienced a major increase in the current year. The rate of gold futures, which was approximately 31,500 per 10 grams at the beginning of the year, has gone up to 38,000 within a period of eight months. Considering the whopping rise in the gold futures prices, it won’t be wrong to say that gold prices have broken the record this year. It has seen an increase by as much as 20% in 8 months. If you check the prices of gold futures in the spot market, you will notice how the rates of this exclusive commodity have reached up to 38,470 per 10 grams.

Considering the fact that India imports a major portion of the gold from the International countries, the common factors that drive the prices of this commodity are the Rupee-dollar rate as well as import duty. The surprising fact is that gold prices have seen a major rise in foreign countries as well. According to recent reports, the global rate of gold has crossed $1,500. Let’s have a quick look at the reasons why gold prices have witnessed a massive rise this year in India.

  • The War Between China and the United States

One of the main reasons that have driven the gold prices this year is the constant tension between China and the United States. In spite of several proposals and negotiations, the two countries couldn’t come up to a conclusion. As a result, the trade war between China and the US escalated.

Donald Trump, the president of the United States, have made it very clear that he is not willing to make any deal and negotiations with China. The constant war escalation between the two strong economies has pushed the gold prices up. Even though the gold prices have already witnessed sharp gains, the analysts are expecting further increase in the rates.

  • Increased Import Duty

The Indian government had declared an increase in the import duty for gold in the month of July this year. Gold, the import duty for which was 10%, has now increased to 12.5%. As India is one of the major importers of gold, the rise in import duty led to an increase in the gold rates.

  • Lower Interest Rates

The escalating war between the US and China have made analysts anticipate a drop in the US interest rates. As the rates of interest go down, the price of metals like gold increases. Recently, the US reduced its interest rates by 25 basis points. As per the analysts, this ongoing trade war between the two powerful nations will result in a further decrease in interest rates (increasing the gold prices).

  • Global Slowdown

The US-China tariffs can result in the global slowdown. It can negatively affect the supply chains, weaken investment, and slow down the overall growth of the nations. Gold is considered one of the safest commodity trading options in the unpredictable times, increasing its demand and thus, the rates.

Also Read: Strategies for Trading the Gold-Silver Ratio

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It is, therefore, important to learn both the pros and cons of intraday trading to get a better idea of how this market works and how exactly you can grow your money. In this post, we will walk you through a few advantages and disadvantages of intraday trading. So, keep reading to learn more.

• Beware of fixed/guaranteed/regular returns/ capital protection schemes. Brokers or their authorized persons or any of their associates are not authorized to offer fixed/guaranteed/regular returns/ capital protection on your investment or authorized to enter into any loan agreement with you to pay interest on the funds offered by you. Please note that in case of default of a member claim for funds or securities given to the broker under any arrangement/ agreement of indicative return will not be accepted by the relevant Committee of the Exchange as per the approved norms.
• Ensure that pay-out of funds/securities is received in your account within 1 working day from the date of pay-out.
• Be careful while executing the PoA (Power of Attorney) – specify all the rights that the stock broker can exercise and timeframe for which PoA is valid. It may be noted that PoA is not a mandatory requirement as per SEBI / Exchanges.
• Register for online applications viz Speed-e and Easiest provided by Depositories for online delivery of securities as an alternative to PoA.

• Do not keep funds idle with the Stock Broker. Please note that your stock broker has to return the credit balance lying with them, within three working days in case you have not done any transaction within last 30 calendar days. Please note that in case of default of a Member, claim for funds and securities, without any transaction on the exchange will not be accepted by the relevant Committee of the Exchange as per the approved norms.

• Check the frequency of accounts settlement opted for. If you have opted for running account, please ensure that your broker settles your account and, in any case, not later than once in 90 days (or 30 days if you have opted for 30 days settlement). In case of declaration of trading member as defaulter, the claims of clients against such defaulter member would be subject to norms for eligibility of claims for compensation from IPF to the clients of the defaulter member. These norms are available on Exchange website at following link: NSE, MCX

• Brokers are not permitted to accept transfer of securities as margin. Securities offered as margin/ collateral MUST remain in the account of the client and can be pledged to the broker only by way of ‘margin pledge’, created in the Depository system. Clients are not permitted to place any securities with the broker or associate of the broker or authorized person of the broker for any reason. Broker can take securities belonging to clients only for settlement of securities sold by the client.

• Always keep your contact details viz. Mobile number/Email ID updated with the stock broker. Email and mobile number is mandatory and you must provide the same to your broker for updation in Exchange records. You must immediately take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly.

• Don’t ignore any emails/SMSs received from the Exchange for trades done by you. Verify the same with the Contract notes/Statement of accounts received from your broker and report discrepancy, if any, to your broker in writing immediately and if the Stock Broker does not respond, please take this up with the Exchange/Depositories forthwith.

• Check messages sent by Exchanges on a weekly basis regarding funds and securities balances reported by the trading member, compare it with the weekly statement of account sent by broker and immediately raise a concern to the exchange if you notice a discrepancy.

• Please do not transfer funds, for the purposes of trading to anyone, including an authorized person or an associate of the broker, other than a SEBI registered Stock broker.

• Do not deal with unregistered intermediaries (who are not registered with SEBI/Exchanges).

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