Why Is Gold Sustaining Near ₹1.5 Lakh? Key Reasons Explained

Gold price's staying close to ₹1.5 lakh is clearly not an accident; there are several countervailing elements in today’s market - below are the major elements in brief points;

• Demand for gold as a safe-haven means there is support for gold pricing from investors during global uncertainty - geopolitical tensions, fears of economic slowdown.
• Gold is viewed as a hedge against inflation - therefore the continual price increases of goods keeps the demand for gold high.
• Gold continues to be added to central bank reserves - meaning that the tightening supply keeps the gold rate supported today.
• Gold is priced in US dollars - when the Indian Rupee is weak, the price of gold in India will tend to remain elevated.
• When interest rate cuts are anticipated or yields are softening - gold is an attractive option.
• The strong demand for gold in India (cultural and traditions such as weddings and festivals) creates a perpetual support for the price of gold.
• Psychologically, round numbers tend to be significant and have historically created selling pressure at these support zones.
• The liquidity provided through a gold loan has accelerated the use of gold as an alternative financial asset.
• The supply of gold grows slower than that of the bulk of the other financial assets - thereby helping to sustain gold prices moving forward.

Suggested Read: How are Gold Rates Determined in India?

These points demonstrate that gold remains elevated, therefore will not have severe declines in value