The price per ounce of gold reached a record high of $1,917.90 in August 2011. In 1791, the United States set the rate of gold at $19.49 an ounce and used silver to redeem the currency. In rupee terms, gold rate saw a marginal 3 percent drop due to a massive 12 percent depreciation of the currency against the dollar. Gold rate was trading at Rs 29,600 per 10g in December down from Rs 30,490 per 10g on January 1 in 2013. The rupee was around 61.80 per dollar; it was 55 against the dollar in the comparative period. It was first annual decline in 14 years, with gold prices down 2.6 per cent at the start of 2013.
A major correction seems to have taken place and the price of gold is now approaching its moving average of 50 days. Ratings agency Standard & Poor’s this week lowered its price forecast for gold, but is still betting on a higher price in the long run, forecasting 1,200.
The rate of gold had undergone an intense sell-off with gold suffering its most dramatic one-day drop in 2013 as the US stock markets resumed their rally thanks to further support from Washington. The gold price fell below $1,200 an ounce, its lowest level in three years. The sharpest fall in gold prices in the last decade occurred between October 2012 and July 2013, when it lost more than a quarter of its value for nine months. From January 2008 to August 2013, the rate of gold rose by more than 200 percent, reaching an all-time high of 32,943 rupees per 10 grams in August 2013.
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Gold rate offered negative returns in 2013 for the first time in 13 years, owing to a slowdown in net purchases by central banks after weak investment demand. At the same time, commodity-led demand for gold in China and India fell sharply in the spring, as demand for protection from rising prices diminished due to falling inflation expectations.
Suresh Nair, then executive director of ADM Investor Services International Limited (ADMISI) believed that the primary bear factors likely to push down the rate of gold in the coming years are the economic recovery in the US, a strong dollar due to the Feds tapering program, a minimal threat from global inflation, and sluggish physical demand from traditional buyers like India.
Much depends on gold prices and global market movements, with inflation in the US and rising bond yields posing major risks to the price of gold. The exchange rate between the rupee and the dollar is another factor influencing the gold domestic price, if the USD rises against the rupee, a major correction in the global price of gold could lead to a small dip in India.
It is important to note that gold prices vary throughout the year, and the amounts mentioned here are a representation of the average for the year. Gold has never gained or lost relative to the value of penny shares, dotcoms, or IPOs, but its price movements convey that information. The average gold rate in Mumbai, India for the fiscal year 2013 to 2020 is 1000 Indian rupees per 10 grams.
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The Indian government, which imports most of its gold needs, lowered import duties on gold to offset the price of gold. When the Federal Reserve announced that it would end its controversial stimulus program after the 2008 financial crisis in 2014, gold prices fell sharply. Combined with low inflation rates at the time, this nullified the role of gold as a hedge against rising prices. There have been five or six different phases in which the dollar and gold price have plummeted hard and badly for three months, only to see prices rise in the following three months.
The gradual reduction in quantitative easing will keep bullion prices under pressure. Easy liquidity was the key reason for the rise in gold prices over the past decade. The ongoing positive sentiment in global equity markets will also attract money and cushion the need to invest in safe havens like gold for the time being.
Answer: If we take the annual average price of gold in India in the last 10 years, from 2010 to 2020, the lowest annual average was in 2010 when the price of gold was Rs 18,500 per 10 gram. In 2020, the average price of gold in India is Rs 48,651 per 10 grams.
Answer: Taking into account the annual average price of gold in India, the highest increase in gold prices was from 2010 to 2011, when the average annual price of gold increased from Rs 18,500 per 10 gram to Rs 26,400 per 10 gram.
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