Gold rate in Chennai has become double as compared to other commodities. It constantly sees a trend of weakness during last 2 years. There are many reasons for decrease of gold price in India. At the beginning of last two years reputed banks of the world faced financial crisis. The reason behind this was that banks gave many loans to their customers. On the other hand investors found that efforts of government to clean financial crisis will not be successful. Gold rate in Chennai has clearly met with the advantage from uncertainty as investors withdrew their money from equities and safe sources of monetary profits. The price of gold moves in inversely as compared to the movement of dollars. This yellow colored metal is often used as a hedge against inflation. Many analysts of gold say that prices of gold will not join the trend as its cost follows a different trend. Gold rate in Chennai is based more on the mood of gold investors rather than demand and supply.
Effect of global crisis on gold rate of Chennai:
Commodities other than gold faced a reduction in demand due to deficiency of raw materials. This trend was commenced during the middle of year 2008 after signs of recession were seen clearly. Gold has retained its shine after strengthening of safety factor.
Global crisis was seen during this period continuously for 6 months. In the opinion of ING survey it is not surprising that 97% investors in India made investment in gold after ascertaining gold rate in Chennai. It is being said that global uncertainty has further boosted the mood of investors to buy gold. A survey revealed that decline in the number of Indian investors investing in stock markets planned to invest their money in gold. If the markets show sign of upward trend then the percentage of investment is likely to increase.
The administration is left with little options other than investing money in the banks or creating entity to purchase the sourced loans from banks. Gold rate in Chennai is set by the procedure of gold fixing.