Today Gold Rate in Chennai is Rs. 41,518.70 per 10 grams for 24 Karat
(10 grams = 1 tola gold)
South India is, reportedly, the largest consumer of gold in India. Gold is not just a valuable metal, in Chennai, it also has a traditional value. Gold in Chennai is considered auspicious and has immense significance in marriages and religious ceremonies. In some parts of the country, the precious metal is also seen as an indicator of wealth and prestige in the society. The more gold one owns, the wealthier he/she is considered. Of late, there has been a change in the way people invest in gold such as Gold ETFs and Gold Sovereign 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.
Trend of Gold Rate in Chennai for last 10 days
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 jewellery 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.
Why Chennai is considered as a big consumer of gold in India?
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.
How are Gold Rate in Chennai Determined?
Determining gold rates in any area is a complex task. A number of factors are taken into consideration before determining gold rate in Chennai. 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 of the factors that brings variations in today’s gold rate in Chennai. It is advisable to invest when the prices decline. It needs a long-term to enjoy the real benefits of gold investment.
Trend of Last 4 Months of Gold Rate in Chennai:
|Gold Price Trend in December 2019|
|Trend||24 Karat Gold (Rs/10gm)|
|Rate on 01-December-2019||38,994.70|
|Rate on 31-December-2019||39,978.60|
|% Change||-2.52 %|
|Gold Price Trend in November 2019|
|Trend||24 Karat Gold (Rs/10gm)|
|Rate on 01-November-2019||39,529.40|
|Rate on 30-November-2019||38,780.80|
|% Change||1.89 %|
|Gold Price Trend in October 2019|
|Trend||24 Karat Gold (Rs/10gm)|
|Rate on 01-October-2019||38,374.30|
|Rate on 31-October-2019||39,219.30|
|% Change||-2.20 %|
|Gold Price Trend in September 2019|
|Trend||24 Karat Gold (Rs/10gm)|
|Rate on 28-September-2019||38,459.90|
|Rate on 29-September-2019||38,695.20|
|% Change||-0.61 %|
Purity Marks for Gold Jewellery in Chennai
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.
Must Read : Know How Jewellers Quote Gold Jewellery Rates
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. Digital Gold, Gold ETFs, etc. are some of the instruments which allow you to trade in 24K pure gold.
- 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.
GST Impact on Current Gold Rate in Chennai
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.
De-monetization and its Impact on Gold Price in Chennai
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.
Things to be aware of when buying gold in Chennai
- 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.
Gold as an Investment in Chennai
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:
- Jewellery – The people of the South India invest in Gold mostly in the form of jewellery, as this jewellery is associated with their tradition. Jewellery 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 jewellers or Banks. This Gold can be used and exchanged in the future for money or can also be utilized to make jewellery.
- Gold Exchange-traded Funds – Gold Exchange-traded Fund, also known as Gold ETF, is yet another way to invest in paper gold. It is looked upon as a good investment option that has higher liquidity and lower cost as compared to mutual fund shares.
- Gold Sovereign Bonds – SGBs or Sovereign Gold Bonds are government securities. It is available in the form of paper gold and is traded in grams. These bonds can be bought by any individual from 1g to 4 kgs. Even parents can buy them on behalf of their children.
- Digital Gold – Digital Gold is yet another way of trading in gold online. But to trade in digital gold, you do not need to have a demat account. Also, it allows people to buy gold in fractions of gold as per their convenience. When enough quantity of gold is accumulate, customers can sell it whenever and wherever they want and earn profits.
Why Invest in Gold in Chennai ?
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.
Is it Sensible to Make Long-Term Investment in Gold in Chennai?
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.
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