South India is, reportedly, the largest consumer of gold in India. Gold is not just a valuable metal, in India, it has a traditional value. The gold in Chennai is considered auspicious and has immense significance in marriages and religious ceremonies. In some parts of the country, gold is also seen as an indicator of wealth and prestige in the society. The more gold one owns, the wealthier he is considered. Of late, there has been a change in the way people invest in gold such as Gold ETFs and Gold Bonds but people are still interested in investing their money in gold. Today gold rates in Chennai have also been showing impressive trends over the years again adding to the demand of gold in the city.
South India has maintained its position as the largest consumer in terms of gold investments in the country. Furthermore, among the southern states, Tamil Nadu leads in the consumption of this yellow metal in terms of gold investments. Big jewelry brands target the southern region of India for investments in gold. According to a recent report by Karvy Private Wealth, the four southern states together account for more than 40% of the country’s overall demand for gold jewellery.
The table given below shows how gold price in Chennai performed in the last 10 days:
|Date||22 Karat (per 10 grams)||24 Karat (per 10 grams)|
|19-Sep-17||Rs. 28270||Rs. 30235.3|
|18-Sep-17||Rs. 28480||Rs. 30459.9|
|17-Sep-17||Rs. 28550||Rs. 30534.8|
|16-Sep-17||Rs. 28550||Rs. 30534.8|
|15-Sep-17||Rs. 28670||Rs. 30663.1|
|14-Sep-17||Rs. 28650||Rs. 30641.7|
|13-Sep-17||Rs. 28650||Rs. 30640|
|12-Sep-17||Rs. 28570||Rs. 30556.2|
|11-Sep-17||Rs. 28740||Rs. 30738|
|10-Sep-17||Rs. 28950||Rs. 30962.6|
Reports show that South India accounts for more than 30 percent of the total gold consumption in India. Chennai is developing as a professional hub and generating numerous job opportunities every year. When a majority of Chennai’s population is young, why is it still resorting to a traditional investment instrument like gold? Following are some of the reasons why Chennai is a big consumer of gold in India:
Help during Financial Crisis- Gold is seen as an investment and at the same time as a saving instrument. Whenever a financial emergency strikes, gold gives you refuge. One can sell the gold to meet an urgent need which is not possible in case of assets with lower liquidity.
Lesser Risk- Gold is considered as a safe haven by the investors. History has shown that in times of war, political uncertainty and haphazard governance, only those who were holding gold managed to stay on top. The current scenario in the country is also full of uncertainties. Gold, being a safe investment, attracts people. Gold price in Chennai has also been performing very well, hence the high demand.
Hedge against Inflation- Investing in gold makes sense in India because the Indian Rupee value is declining against the U.S. Dollar and inflation is rising. During times of inflation, investors realize that their money is losing value and hence they try to invest in a hard asset that comes with lesser risk. And what is better than gold in such a scenario. Gold is globally priced in U.S. dollar so when someone (particularly the central banks) has to purchase gold, they have to do away with their dollars which, in turn, drives the U.S. dollar lower.
Traditional Value- As we have mentioned above, gold in Chennai has a traditional value attached to it. The use of this yellow metal during Puja ceremonies, weddings and other religious events keeps its demand high throughout the year. Even a younger crowd is attracted to gold owing to the values engrossed in them since childhood.
Portfolio Diversification- Apart from the above reasons, gold is used by investors to diversify their portfolio. Historical trends show that gold is the best diversifying component as it is inversely related to other financial instruments.
A number of factors should be kept in mind while importing gold into the country. Any discrepancy in the import of gold can lead you to legal hassles. Given below are a few things one should know:
- Women are allowed to import gold worth a maximum of Rs 1 Lakh provided that they have stayed in a foreign country for more than one year.
- Men are allowed to import gold worth Rs 50,000 only with the same conditions.
- Talking about the weight of gold, you are not allowed to carry more than 1 kg of gold.
- When taking gold out of the country, make sure you get the export certificate made. This is the legal way of exporting gold and the certificate will also work as a proof that you took gold out of the country.
It is mostly the central bank and some big corporations that import bulk gold into the country. But for a common man, these rules have been made to make it a breeze for them and not get into legal troubles.
Gold Rate Trend in Chennai, Aug 2017
|Trend||Gold Rates (24 Carat)|
|On Aug 1st, 2017||Rs. 2990/gm|
|On Aug 31st, 2017||Rs. 3073/gm|
|Highest Rate during Aug||Rs. 3073/gm|
|Lowest Rate during Aug||Rs. 2956/gm|
|Overall Trend in Aug||Rising|
Gold Rate Trend in Chennai, July 2017
|Trend||Gold Rates (24 Carat)|
|On July 1st, 2017||Rs. 2950/gm|
|On July 31st, 2017||Rs. 2925/gm|
|Highest Rate during July||Rs. 2950/gm|
|Lowest Rate during July||Rs. 2796/gm|
|Overall Trend in July||Decline|
Gold Rate Trend in Chennai, June 2017
|Trend||Gold Rates (24 Carat)|
|On June 1st, 2017||Rs. 2977/gm|
|On June 30th, 2017||Rs. 2962/gm|
|Highest Rate during June||Rs. 3030/gm|
|Lowest Rate during June||Rs. 2942/gm|
|Overall Trend in June||Decline|
Gold Rate Trend in Chennai, May 2017
|Trend||Gold Rates (24 Carat)|
|On May 1st, 2017||Rs. 2984/gm|
|On May 31st, 2017||Rs. 2968/gm|
|Highest Rate during May||Rs. 2984/gm|
|Lowest Rate during May||Rs. 2889/gm|
|Overall Trend in May||Decline|
Gold Rate Trend in Chennai, April 2017
|Trend||Gold Rates (24 Carat)|
|On April 1st, 2017||Rs. 2956/gm|
|On April 30th, 2017||Rs. 2984/gm|
|Highest Rate during April||Rs. 3035/gm|
|Lowest Rate during April||Rs. 2954/gm|
|Overall Trend in April||Rising|
Gold Rate Trend in Chennai, March 2017
|Trend||Gold Rates (24 Carat)|
|On March 1st, 2017||Rs. 2994/gm|
|On March 31st, 2017||Rs. 2942/gm|
|Highest Rate during March||Rs. 2994/gm|
|Lowest Rate during March||Rs. 2906/gm|
|Overall Trend in March||Decline|
Determining gold rates in any area is a complex task. A number of factors are taken into consideration before determining Chennai gold rate. Let’s talk about these factors in some detail:
Demand for Gold- Like for all other commodities, demand for gold in Chennai is one of the most important factors that impact its price in the city. Increase in demand will lead to increase in gold price in Chennai and lower demand will lead to price reduction.
Interest Rates- The global shifts in the interest rate of financial products also have an effect on the price of gold in the country. When interest rates increase, people sell the gold they are holding in order to get cash. When this happens, there is higher supply of gold in the market leading to a reduction in its rates. Contrarily, lower interest rates encourage people to hold more gold; increased demand leads to an increase in rates.
Government Policies- Price trends of all investment instruments are directly affected by the government policies pertaining to them. For example, when the government imposes duties, taxes and tariffs on the yellow metal, its prices decrease in the market. And when the regulations are relaxed, prices go up.
Other Factors- There are a host of other local factors that impact gold rate in Chennai today. Changes in the micro and macro-economic environment, local government policies, etc. are some such factors. It is advisable to invest when the prices decline. It needs a long-term to enjoy the real benefits of gold investment.
Gold is an inert metal which means that it does not react with air and oxidise. If any discolouration happens on the gold you are wearing, it means it’s not pure. Purity of gold is the most important thing to check before buying. The Bureau of Indian Standards (BIS) awards hallmarks to gold jewellery based on their purity. Hallmarked gold has its purity guaranteed.
There are three types of gold markings in Chennai-
24 Karat Gold Marking: 24 Karat gold is the purest form of gold and does not have traces of other metals mixed with it. Hence, if you are buying 24 karat hallmarked gold, you can be assured of its purity. However, hardly any jewellery is made of 24 karat gold as it is very soft and pliable.
22 Karat Gold Marking: This is the most popular form of gold used in jewellery making. When you check the jewellery, most of them would have the 22 karat marking. It has 91.6 percent gold in it and the rest of the component may be another metal or a mix of other metals.
18 Karat Gold Marking: Another common form of gold marking you will see on jewellery is 18 Karat marking. It is used for making intricate jewels with a lot of carving, since it is comparatively hard and easy to work upon.
Apart from these three forms of gold markings, other lower karat gold jewellery can also be found in the market. When you go out to buy gold jewellery, it is advisable to check for the hallmark. 24, 22 and 18 karat gold are the most popular in India and also a prudent buy. This is because very low content of gold in the jewellery would make it hard for you to sell it in the open market, particularly in Chennai, where people usually hold high quality yellow metal.
After the implementation of new goods and service tax regime, gold has become dearer. Previously excise was levied at 1% and VAT at 1.5% on the yellow metal but now flat 3% GST is levied on it. This move was welcomed by the big market players like Tanishq and PC Jewellers as the cost gap between the organized and unorganized gold market will come down. GST is also sought to bring clarity and transparency in the market. Apart from 3% GST, taxes on processing charges and customs duty remain unchanged at 5% and 10%, respectively.
The effects of demonetization of gold prices in Chennai were visible within a week of this monumental announcement made by the PM. People started exchanging their old 500 and 1000 rupee notes with gold and they agreed to pay huge premium for it. Gold consumption was expected to weaken after demonetization but instead, it boomed.
However, other global scenarios led to a fall in the gold prices, the effect of which was seen to a lesser extent in the country because at the time we were the largest consumers of gold in the world, after China. But such deflationary situation caused avid investors to shift to higher interest commodities. In 2017, gold is expected to stabilize or improve given the fact that 2016 end was fabulous for the yellow metal. Festive season and marriages in Chennai further led to an increase in the demand for gold.
Purity is the first thing you should be concerned about when buying gold in India. Always go for hallmarked gold as it assures that the gold is of pure quality. 24 karat, 22 karat and 18 karat gold jewellery are the three best kinds. Such hallmarking is done by the BIS and ensures that the customer is not cheated.
Secondly, you should try not to melt gold and make new ones as it might make the end product less pure. KDM is an important terms you should know about. KDM jewellery contains a mixture of gold and cadmium where cadmium is used as a solder. Earlier different metals were used to solder gold jewellery so when melted it became really difficult to separate the two metals since the melting points of the two metals were different. However, in case of KDM, cadmium has a lower melting point than gold and hence maintains the purity of the base jewellery even when melted.
The third important thing to keep in mind is the credibility of the seller. Always buy from a seller who has a good background and is an established gold dealer in the city. Buying gold online can also be extremely risky hence deal with those who have a good track record.
One must visit the well-known and established gold dealers in the city to avoid any kind of deceitful activity. Here are some of the renowned gold dealers in Chennai-
- Prince Jewellery, RT Nagar, Chennai
- Lalitha Jewellery and Mart, T Nagar, Chennai
- Sree Kumaran Gold House, Usman Road, Chennai
- Khazana Jewellery, Catheral Road, Chennai
- G R Thanga Maligai, Several Stores
Apart from these, there are several other popular jewellery stores in the city including Tanishq, Reliance Jewels, etc.
One on the major states in the buying of gold jewellery, there are a number of gold investment options in Chennai, the main of which are:
Jewelry – The people of the South India invest in Gold mostly in the form of jewelry, as this jewelry is associated with their tradition. Jewelry made of gold is heavily worn and purchased by the women in the state of Tamil Nadu. Gold is considered to be a safe investment in Chennai and the gold consumption with this state justifies this fact.
Gold Bullion Coins and Gold Bullion Bars – Gold can also be purchased as gold bars or coins from the various jewelers or Banks. This Gold can be used and exchanged in the future for money or can also be utilized to make jewelry.
Gold Exchange Traded Funds - Gold, with good reason, is looked upon as a good investment option and you can buy an ETF if you wish to invest in Gold. ETFs have higher liquidity and lower cost as compared to mutual fund shares, making them a profitable investment alternative.
Why Invest in Chennai Gold?
Gold rate in Chennai today has leaped up to numbers that couldn’t be imagined about a decade ago. The yellow metal has been performing so good in the past few years that not only the traditional investors but the new tech-savvy professional crowd is also looking forward to reap the benefits of gold investment in Chennai. The heavy demand for gold from this south Indian city has led to the price rise and in trend is expected to continue in future. Gold provides the perfect hedge to middle class families in times of crisis. At the same time, avid investors see it as a hedge against inflation and the falling of rupee against the U.S. Dollar. Moreover, gold is a safe investment and guarantees good returns, which is why it is a good idea to invest in this metal.
Yes. It is wise to make long-term investment in gold. The demand for gold in India, particularly in the southern parts, has been rising considerably. To be specific, gold consumption rose from 442 metric tonnes in 2009 to 974 tonnes by 2013. China and India are the two largest consumers of gold in the world. India uses gold majorly for jewellery making whereas in China it is used as bars or coins for investment purpose.
Gold should definitely be a part of your long-term investment portfolio. As it is a safe instrument, it helps in neutralizing other high-risk investment instruments. Moreover, it hedges the effects of inflation and weakening of the rupee against U.S. Dollar. Several schemes are offered by local jewellers to encourage people to invest in gold. It is advised to make small investment in gold instead of a lump-sum.
The rates that are mentioned below are commonly for 24 karat and 22 karat gold. The weights also vary, e.g. 1 gram, 8 grams, 10 grams, 100 grams, 1 kilogram, etc.
The prices for various gold pieces have fallen and risen, keeping in line with the varying demand and price of the precious yellow metal.
Prices for 24 karat pieces: Over the last three years, from 2012 to 2015, the price of gold reached a high at an amount of Rs. 3,276 for one gram. This was on the 27th of November, 2011. The following years saw a steady decline in the prevalent rates and prices for gold in Chennai. The prices dipped to an amount of Rs. 2,608 for a gram of gold on the 18th of April, 2013. The next few months also saw a rather choppy performance over the next few months before reaching a new low at Rs. 2,544 on June 28th, 2013. By 26th August, 2013, the rates rallied to Rs. 3,255 for a gram of gold. The general trends in the rates for gold have been of decline since then. The prices dropped to an amount of Rs. 2,580 on the 1st of December, 2014. The following months saw some amount of recovery in terms of rates but they still remained predominantly below the Rs. 2,800 mar for a gram of gold. On the 7th of June, 2015, the rate stood at an amount of Rs. 2,703 per gram.
Prices for 22 karat pieces: The price trends for 22 karat gold have in general mirrored the variations of the prices for 24 karat gold, falling and rising at the same rates and times. The maximum price that was recorded for 22 karat gold over the last three years was recorded on the 27th of November, 2012 at a rate of Rs. 3,604 per gram of gold, while the lowest price that was recorded was at a rate of Rs. 2,372 per gram on the 1st of December, 2014. Given the fact that 22 karat gold is not as pure as 24 karat gold, it always trades at a price lower than that of the 24 karat gold. More recently, the price for the 22 karat gold has been ranging between an amount of Rs. 2,400 per gram to Rs. 2,600 per gram. As of the 7th of June, 2015, the price for a gram of 22 karat gold stood at Rs. 2,521 per gram.
Prices for 24 karat gold: The highest price that was recorded for the year of 2015 for 24 karat gold from the beginning of the year until the 7th of June 2015 was an amount of Rs. 2,865 per gram, on the 21st of January, 2015. Meanwhile, the lowest recorded price for the same time period was an amount of Rs. 2,619 per gram of 24 karat gold, on the 18th of March, 2015.
Prices for 22 karat gold: The highest price that was recorded for the year of 2015 for 22 karat gold from the beginning of the year until the 7th of June 2015 was an amount of Rs. 2,678 per gram, on the 21st of January, 2015. Meanwhile, the lowest recorded price for the same time period was an amount of Rs. 2,441 per gram of 22 karat gold, on the 18th of March, 2015.
Gold Prices Decline at Hint of Fed Rate Increase
9 January, 2017: Gold prices witnessed a decline this week as a new report suggested that a Fed rate hike is imminent, which is expected to boost the American Dollar and US inflation. However even after this decline, gold rates are much higher as compared to their rates last month. With the new US president Trump scheduled to assume office in the coming week, many experts project that gold prices will react in interesting ways to reflect investor sentiments. When Trump emerged as the US President-elect, gold prices fell by 12% as investors sold their gold investments and invested elsewhere under the impression that new spending and tax policies would boost the dollar as well as inflation leading to Fed rate increases.