DETERMINANTS OF GOLD PRICE MOVEMENTS IN INDIA
DOI:
https://doi.org/10.53555/018pd744Keywords:
Gold Price Determinants, Exchange Rate (USD/INR), Inflation and Commodity Prices, Indian Economy, Safe Haven Asset, Macroeconomic FactorsAbstract
Gold occupies a central role in India’s financial and cultural landscape, serving both as a traditional store of value and a modern investment asset. This study examines the determinants influencing gold price movements in India over the last decade, emphasizing the interlinkages among the Indian Rupee–US Dollar exchange rate, global crude oil prices, and domestic inflation trends. Using monthly time-series data from 2015 to 2025 derived from sources such as the World Gold Council, Reserve Bank of India, and the World Bank, the analysis applies correlation and regression techniques to explore short- and long-term dynamics. The results reveal a strong positive relationship between gold prices and the USD/INR exchange rate, suggesting that currency depreciation significantly raises domestic gold prices. Inflation shows a moderate positive association, while crude oil price fluctuations indirectly affect gold through their impact on inflation and current account balances. The study also compares recent trends in gold and equity markets, noting a simultaneous surge driven by global economic uncertainty, geopolitical tensions, and hedging demand. The findings provide insights for investors, policymakers, and researchers into how macroeconomic factors interact to shape India’s gold market behavior and its implications for portfolio diversification and financial stability.
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