Why have the prices risen though dollar rate is less than its all-time high of $1918 an ounce of August 2011?
The rupee depreciated from 45 levels to the USD in 2011 to around 70.85 currently even as gold in dollars jumped by $100 an ounce in the past month to close to $1,500. This has caused 99.5% purity gold to log in a (closing) rate of Rs 37,196 per 10 gm (ex GST) according to India Bullion & Jewellers Association polled rates on Friday.
Also, the government raised the import duty on gold by 2.5% to 12.5% on July 5. This has also partly contributed to the rise.
India imported on average 768.6 tonnes every year from 2014-18. The depreciation of the rupee and rise in dollar gold therefore make gold costlier for consumers here.
Traditionally, it has been a store of value and is easily fungible in times of distress. Maximum sales happen during festive and marriage seasons, commencing in September-October.