Indian temples are estimated to have thousands of tonnes of gold donated by devotees, and they can even opt for monestisation schemes, where jewellery is melted to form gold bricks and deposited in banks. This not only allows temples to cash in on donated gold, which is stored securely in bank vaults, but also boosts the gold reserves of a country. Gold is tied to cultural and religious beliefs in India, which is why prices of the yellow metal in India are up even though it is affected by uncertainty globally.
Will global headwinds impact demand?
The price of 22 carat gold has gone up from Rs 4,655 per gram to Rs 4,685 per gram, while for 24 carat it has hit Rs 5,111 per gram up from Rs 5,085. Although a weaker dollar did allow global gold prices to make gains, the US Federal Reserve’s 75-point rate hike and a hawkish stance, have managed to curb the surge. The US Fed chairperson has disappointed investors by announcing that the ultimate increase in interest rates will be beyond expectations.
Chennai’s gold rates were highest at Rs 4,741 per gram for 22 carat, and Rs 5,172 per gram for 24 carat of the yellow metal.
Delhi followed with Rs 4,700 for a gram of 22 carat gold and Rs 5,126 for the same volume of 24 carat gold.
Mumbai and Kolkata residents will be paying Rs 4,685 and Rs 5,110 per gram for 22 carat and 24 carat gold respectively.
Storage and monetisation in India
Investment in gold is attractive, but storing it is what adds a cost for those holding the yellow metal, as banks also charge for keeping it in vaults. But instead of keeping it at home, monetising gold can even allow people and institutions to earn from their investment on regular intervals. You can make 2.25 per cent returns a year on medium term gold deposits, and 2.50 per cent for long term schemes.
Gold comes with limitations and concerns
Recently the Kedarnath shrine was adorned with 230 kg of gold sheets, but now priests and local authorities are concerned about security of so much precious metal.
The amount of gold people can keep at their homes is also restricted for different members of the household. Married women are allowed to store 500 grams of gold, while the same is 250 grams for unmarried women, and when it comes to men, the quantity comes down to 100 grams.