2. Inflation

Inflation is the discussed topic of every Indian Household. From rising price of gas to gold, everything is falling hard on the shoulders of Indian men and women. Taking into account the trend of price rise gold in the past years, it is quite shocking to note that in the last 33 years, gold rose 32 times to reach 32,000 per 10 grams on sep 2012.

Looking at the current rate of inflation which is 7.18 percent, may also push the price of yellow metal in the near future. But there is also a positive aspect of Inflation, such as if you invest in gold today, after 20 to 30 years the bullion will definitely return you much more than the money you invested.

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3. Demand for Gold in Greater China and India

The largest consumers of gold in the world are Greater China (China, Hong Kong and Taiwan) and India. Since the demand for gold in these countries remains high, Gold easily trades in the market despite being expensive. In case of India where gold holds an important part of rituals and ceremony, a slight increase in gold price does not affect the buying sentiments of the consumers.

As in the Hindu Culture, few day in a year are considered auspicious for buying gold like Akshaya Tritiya, Dhanteras and Lakshmi puja, traders will keep gold prices high during these days to earn extra profits out of lofty demand.

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