The price of gold shot up today, giving a huge disappointment to jewelery lovers and those trying to buy jewelery for special purposes including weddings. It increased by Rs 120 to Rs 6,825 per gram. Pawan also surged by Rs 960 to reach Rs 54,600. This is the highest price in the last two and a half months. This is the biggest rise in gold prices since the central government reduced import duty in the budget on July 23. On August 17, which was Chingapiravi day, it was Rs 105 per gram and Rs 840 per gram.

During this month, pavan was priced at Rs 53,360 and Rs 6,670 per gram. Compared to that, pavan has increased by Rs 1,240 and Rs 155 per gram so far this month. Pawan’s all-time record price in Kerala was Rs 55,120 on May 20. Today’s price is just Rs 520 away from breaking this record.

18 carat silver

18-carat gold prices rose by Rs 100 to Rs 5,660 per gram today. Recently, 18 carat jewelery has been in high demand in Kerala as the price is much lower compared to 22 carat gold. Silver prices are also increasing. Today, it is trading at Rs 93 per gram, up by Rs 3. This price hike is a huge blow to those who buy silver padasara, aranjanam, bangla, puja material, utensils etc. and those who use silver for industrial purposes. The international silver price (spot silver) rose by two and a half percent and reached 30 dollars. Platinum, palladium etc. are also increasing in price.

‘Rocketillery’ international price

Prices in Kerala are also influenced by the surge in international prices. Spot gold, which was in the range of $2,509-$2,517 an ounce yesterday, rose to $2,568 by night Indian time. It is currently trading at $2,567. Last month’s record of $2,532 has become a thing of the past.

Why do international prices fly?

Movements in America, the world’s largest economic power, boost gold prices. The Federal Reserve’s goal is to keep retail inflation in the United States at 2 percent. It has been coming down to comfort levels in the last few months. Inflation, which was above 4 percent in previous months, has been below 3 percent in the last two months; 2.5 percent in August.

The Federal Reserve has made it clear that it will not wait until inflation reaches 2 percent to cut the key interest rate. As inflation has started to decline, the possibility of interest rate cuts has also increased. Even a small reduction in interest rates will send international gold prices soaring. These expectations are driving gold prices.

What happens to gold if interest rates fall?

The meeting of the crucial monetary policy decision committee of the Federal Reserve, the American central bank, is on the 17th and 18th of this month. The monetary policy will be announced on the 18th. The base interest rate is currently at a decade high of 5.25%-5.50%. Many surveys estimate an 87% chance of a 0.25% discount. Expectation of 13% surveys is 0.50% concession.

Lower interest rates weaken the dollar and the yield on US government bonds (US Treasury bond yields). As they do not get much benefit (return) from these, investors withdraw their money and move it to higher return schemes like gold ETFs. This will also lead to an increase in gold prices.

The 10-year Treasury bond yield is currently down at 3.651 percent and the US dollar index against six major currencies, the euro, yen and pound, is at 101.08. Last April, the 10-year Treasury bond yield was 4.7 percent. The US dollar index was at a strong 106.05 last June. Due to the fear of falling interest rates, these are now weak and investors are abandoning them.

Where is the price of gold?

On January 1, 2024, the price was $1,848 per ounce and is now close to $2,570. Estimates suggest that if the current trend continues, the price may soon breach $2,600. The all-time high gold price in Kerala was recorded on May 20 at Rs 6,890 per gram and Rs 55,120 per gram. If international prices cross $2,600, prices in Kerala will also jump proportionately.

Indications are that the US central bank, the Federal Reserve, may reduce the base interest rate by 0.98 to 1 percent in 2024 alone. That is, observers see the possibility of a massive rise in gold prices this year.

Movement of gold prices
(Pavan Price)

• July 17 – 55,000
• July 23* – 51,960
• July 26 – 50,400
• August 7 – 50,800
• August 28 – 53,720
• September 5 – 53,360
• September 6 – 53,760
• September 12 – 53,640
• September 13 – 54,600

(*Union Budget Day (The reduction in import duty on gold at that time caused the price to fall sharply).

Today, a Pavan jewelery is Rs 1,129 more than yesterday

54,600 is the price of a Pawan today. In addition to this, 3% GST, 53.10 hallmark fee and labor charges will be added to the jewelery price. The charges vary from jeweler to jeweler depending on the design of the jewellery. It can be anywhere from zero to 30 percent.

Assuming a minimum 5% commission, you can get a Pawan jewelery in Kerala only by paying Rs 59,105 today. 7,388 per gram of gold jewelry. It was Rs 1,129 per gram and Rs 141 per gram higher than yesterday’s price. This price hike is a big blow to those who buy large quantities of gold jewelery for purposes including weddings.