Today’s Gold Rate in Mangalore

Traditionally in Mangalore, gold is handed down from one generation to the next as a gesture of transferring the valuable possessions and inheritance. Though jewellery is predominant option for buying gold, there are some more options that the dwellers of this city relies upon when it comes to investment in gold. These are as follows:

• Investing in physical form of gold — People may also prefer parking their extra money in the form of physical gold compared to putting money in banks and other investments. Though jewellery is the traditional method of investing in gold, apart from jewellery, gold is also traded in the form of coins and bullions. The disadvantage of jewellery is the heavy making charges (about 20% of the cost of gold), which are not retrievable while selling jewellery. Whereas, the coins, bars and slabs give more liquidity and higher resale value without any wastage compared to jewellery.
• Gold ETFs – This Exchange Traded Funds (ETF) of gold offers another option of investment in gold for the people in Mangalore. These are traded like mutual funds. There are good options for small scale investment in gold because it is held in electronic form, there is no need of storing and protecting these. The investment value could be checked any time on a real time basis and funds could be liquidated as required. There is no concern about the quality, impurities and adulteration as compared to buying gold in physical form.

In Mangalore gold rates are subject to various domestic and global factors. Below are the short description of these:

1. Inflation – Fluctuation in the value of currency and inflation affects gold price. Gold works as a hedging instrument against these resulting in increase in rates. When the currency weakens, gold offers better investment option.

2. Demand and Supply – Mangalore traditionally had high demand for gold and since domestic production could not  keep up with the demand, gold is required to be imported. The import affects the price. During high inflation, gold purchase goes up, creating more demand and rise in gold price. Inflation within India and in global economy affects both the demand and prices in the same way. All requirements from jewellery and industry sectors compel India to import large amount of gold every year. So, the global trend of gold affects the gold rate in India as well. The production, import and the balance of demand and supply is critical in determining prices. The price of gold is not limited to the amount of the metal but includes the mining, production and processing costs as well.

3. Global Trend – The gold rate in Mangalore is highly influenced by global trend. Gold is known as  a crisis commodity since people invest more in gold during turmoil in currency and failing market economy. The value of dollars goes in opposite direction from the gold rates and the effect is felt locally as well. So any global political disturbance increases gold price because consumers consider gold as the safe heaven to invest in.

4. Interest Rate — Interest rate trends are influenced by gold rate. When interest rate moves up, people tend to sell gold to utilize the money for different investment opportunities that might offer good returns. On the contrary, reduction of interest rates increase the apparent value of gold. This increases gold price since the opportunity cost to hold back gold is less compared to other investments. Currently,  with the interest rate being low, gold is considered  the preferred tool for investment.

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