Gold Prices Increased in India with Stronger Dollar against Weaker Rupee

Prices of gold in India have been changed a bit due to falter in international market and weaker rupee against US dollar in the local market. However, ahead of the festive season, demand for gold has been increased. As gold has an inverse relation with dollar, the currently surging US dollar has created pressure on international gold market. Gold prices are affected by the exchange rate between Indian rupee (INR) and US Dollar (USD). As US dollar gets stronger against weaker Indian rupee, the local gold market has its affect found because most of the metals are imported from abroad and are paid in dollars.

Reuters reported:

“This time the demand has been continually high,” said Mayank Khemka, managing director of Khemka International Pvt Ltd in New Delhi, referring to gold’s dip below 12,000 rupees per 10 grams early this month that sparked off widespread buying.

Dealers in banks said supplies continued to falter with delays ranging to up to two weeks and premiums reigning between $3 to $6 dollars an ounce.

Demand for silver too remained good, and supplies low, the dealers added.

Following the recently held Raksha Bandhan festival, the festival coming up next is Ganesh Chaturthi which will be on 3 September. During Ganesh Chaturthi, demand for gold generally goes up. Here, we can see that supply of metal is less, despite high demand. So, gold price might rise up in the coming days in Indian gold market.