Besides its appeal as the choicest metal for Indian celebrations, gold has long been a time-tested hedging tool for investors in India, and Hyderabad is no exception. Gold prices in Hyderabad have been rising steadily, with inevitable fluctuations, over the past few years, especially during the crisis that hit economies worldwide in 2019 and ’20. Today, the gold rate in Hyderabad is approximately INR 60,000 and is expected to fluctuate in the backdrop of factors like the US Fed’s rate hikes.
Current Scenario of Gold Investments in Hyderabad
Hyderabad has emerged as one of the crucial financial centres in southeastern India, and demand for gold as an investment has also risen in tandem. A recent report by Axis My India shows that in tier-1 cities like Hyderabad, gold is the most preferred form of investment, with nearly 50% of the population buying gold. Further, 36% of people in tier-1 cities buy gold as an investment and not jewellery.
Today’s Gold Rate in Hyderabad
The following table presents the rate of pure (24k) and standard (22k) gold in Hyderabad over the past 10 days as of 29th March 2023:
|Date||Pure (24k) 1 gm||Pure (24k) 10 gm||Pure (22k) 1 gm||Pure (22k) 10 gm||Change in percentage|
Factors AffectingGold Rate in Hyderabad
Various factors influence the current gold rate in Hyderabad, and it’s critical to gain an in-depth understanding of these before investing in the yellow metal.
- International Trends
As mentioned earlier, gold prices in Hyderabad are expected to be volatile in the following months if the US Fed decides to hike its interest rates further. That’s because India is one of the largest gold importers globally. Hence, the gold spot price, which is determined in the London bullion market, significantly impacts the prices of the metal domestically.
This price determination is subject to various kinds of international developments, including rate hikes by central banks of major economies, the political and economic stability of exporting economies, and supply chain disruptions. These factors, individually or collectively, can sway today’s gold rate in Hyderabad.
- Central Bank Reserves
The Reserve Bank of India keeps the largest reserves of gold in the country. If the RBI buys more gold, reserves in the broader market get depleted. If demand remains constant while the supply has been shortened, the current gold rate in Hyderabad will increase. Conversely, if demand falls more than supply, prices will tumble.
Herein, considering demand cycles is also critical to gauge gold price movements. During wedding and festive seasons, gold demand usually surges. Demand is also high after a profitable harvest season, as rural parts buy significant amounts of gold.
- INR Value
Rupee’s value also factors in the value of gold in Hyderabad. As most of the gold in India is imported, INR’s value against currencies like the Euro, British Pound, and US dollar weighs heavily on what you pay for gold domestically. If INR’s value falls in relation to these currencies, the current gold rate in Hyderabad would increase and vice versa.
Every commodity in an economy sees a rise in price during inflation. Hence, inflation implies a decrease in the purchasing power of a currency, i.e., INR. Due to inflationary pressure, investors often seek out gold to store their wealth to keep the value of their corpus from declining. Hence, inflation correlates to gold demand vis-à-vis today’s gold rate in Hyderabad.
- Interest Rates
RBI’s interest rates also play a key role in gold prices in Hyderabad. If the RBI increases interest rates, gold prices may decrease and vice versa. That’s because investors favour government-issued securities with higher rates than gold.
The purity of the gold you buy also determines the gold rate in Hyderabad. Purity is indicated by the carats, i.e., 24k, 23k, 22k, 20k, 18k, and 14k. Twenty-four-carat gold boasts 99.5% purity, while 22k boasts 91.6% purity. Hence, the rate for 24k gold is higher than Hyderabad’s current 22 carats gold rate.
However, it’s critical to understand that the aforementioned factors may not always have a bearing on today’s gold rate in Hyderabad.
Taxes on Gold in Hyderabad
You’re liable to pay tax on the precious yellow metal when:
- Buying Gold
Besides the factors mentioned above, the taxes imposed on gold when buying can also affect the gold rate in Hyderabad. However, they are not as volatile as the ones above.
The first charge imposed on gold when imported is customs duty, and it’s presently 10%. A 5% Agriculture Infrastructure Development Cess is also imposed on imported gold. Alongside these charges, 3% GST is added to the cost and passed on to the end buyer.
- Selling Gold
The sale of gold attracts two types of taxes based on the duration of holding: long-term capital gains (LTCG) tax and short-term capital gains (STCG) tax. When gold is sold after three years of purchase, LTCG tax applies, which is 20% plus indexation on the sale value. STCG applies when gold is sold before three years of purchase. In that case, the realised value is added to the taxpayer’s annual liability and taxed accordingly.
Alternatives to Physical Gold
For centuries, physical gold has been the only choice of holding among Indians; various alternatives have come up in recent years. These are:
- Digital Gold
It’s the digital alternative to physical gold, which eliminates the hassle of physical storage. You can buy digital gold online, and the seller stores it in a secure vault on your behalf. You can redeem it anytime for physical gold as well.
- Sovereign Gold Bonds
SGBs are Indian government-sponsored securities that are denominated in grams of 24k gold rate. These bonds feature a lock-in period of 5 years and a maturity period of 8 years. However, investors can trade their holdings on stock exchanges.
- Gold ETFs
Gold exchange-traded funds primarily invest in 99.5% pure gold, while a small portion is invested in debt instruments. This instrument can be traded on stock exchanges like equities. However, you need a Demat account to buy gold ETFs.
- Gold Savings Funds
Also known as gold mutual funds, they invest predominantly in gold ETFs. Further, you don’t need a Demat account to invest in gold savings funds.
Alternatives to Gold
There’s no one-size-fits-all solution when it comes to investing. While gold is suitable for certain investors or in certain situations, it may not be the best in other cases. Here are a few alternatives to gold that investors can consider:
- Government bonds
- Company bonds
- Debt mutual funds
- Equity mutual funds
Tracking live gold rates in Hyderabad can be a good starting place if you plan to invest in the yellow metal. However, it would help if you also considered other factors like international developments and the value of INR that sway gold rates in Hyderabad. Besides that, you should factor in your investment objective and risk appetite to determine if gold is the right choice for you.
Frequently Asked Questions
Q. What is the rate of 22k gold in Hyderabad today?
Today, 1g of 22k gold in Hyderabad costs approximately INR 5,500.
Q. How to check gold purity?
Check the BIS hallmark sign and purity grade embossed on the article of gold.
Q. Is gold ETF a good investment?
Gold ETFs invest in 24k gold and offer transparency as they reflect real-time gold prices.
Q. What is today’s gold rate in Hyderabad?
The 10g rate of 24k gold in Hyderabad is approximately INR 60,000.
Q. Is digital gold safe?
Digital gold is 24k or 99.5%-pure gold. Sellers store the purchased gold in highly secure, insured vaults to guarantee zero loss for customers.