Gold fact sheet

GOLD PRICES IN INDIA
In 1930 8 gm Gold Rate = 14.4/- INR

In 1940 8 gm Gold Rate = 28.8/- INR

In 1950 8 gm Gold Rate = 79.2/- INR

In 1960 8 gm Gold Rate = 88.8/- INR

In 1970 8 gm Gold Rate = 147.2/- INR

In 1980 8 gm Gold Rate = 1064.0/- INR

In 1990 8 gm Gold Rate = 2560.0/- INR

In 2000 8 gm Gold Rate = 3516.0/- INR

In Jan 2010 8 gm Gold Rate = 13200.0/- INR


In Jan 2013 8 gm Gold Rate =22000/- INR

In2020………….=??????

Impact of Budget on Gold

The rupee fluctuation has always been a crucial factor in determining Gold prices and it is well known that a weaker rupee can support the gold prices and vice versa. As expected if there are more spending cuts and reforms taken to boost the equity markets and debt markets we would see a possibility of rupee strengthening and pushing gold prices down.

Recently after a series of reforms taken by the government on gold import duty, rate cut and partial deregulation of diesel prices we saw a good fall in gold prices along with the strengthening of Indian rupee. The reforms opted to reduce the Fiscal Deficit will make INR stronger and gold prices weaker; at the same time the level and ways of reforms will also form a crucial part in deciding the fate of gold. In pre-budget discussion among the party the finance minister assured that by the spending cuts and other reforms economy can see a growth level of 6-7 percent in the coming fiscal year. Also, FinMin has already committed to a fiscal deficit of 4.8 percent of GDP in 2013-14 which indicates lesser spending and tightening of imports and stronger rupee. This means, more open markets for investors abroad, reduced spending, reduced fiscal deficit and stronger rupee. As this fiscal consolidation can improve the outlook of the economy it will also reduce the safe haven appeal for gold and reducing the demand for gold.