18K Gold Rate Today in Chennai

Being the capital city of Tamil Nadu, the yellow metal ‘Gold’ holds huge importance in the life of the people of Chennai. It is an integral part of festivals, weddings and religious ceremonies. The city is a beautiful combination of beaches, culture, cuisine and a flourishing business sector where gold is the symbol of wealth and prosperity and owning gold is a sign of success and also safe from an investment perspective. Gold is also a fashion statement and Chennai is known for its beautiful gold design.

What to consider while buying gold in Chennai

• Purity plays an important role while buying the gold, before buying the gold the buyer should check the hallmark which ensures the gold's authenticity and purity and also ask for the certificate of authenticity from the seller.
• Jewellers charge the making cost on the gold jewellery which differs from seller to seller so before purchasing the jewellery the buyer should check the making charge and make an informed decision.
• Choose a reputed jeweller or your family jeweller for authenticity, as a fraud in the jewellery market is quite common these days. Make sure the jeweller follows ethical practices and gives you a GST bill while purchasing.
• Always check the weight of the jewellery before purchasing and make sure to ask whether this includes the weight of gems and stones or not.
• If you are making an online purchase of gold jewellery do check the packaging and delivery policy of the seller. Make sure the jeweller uses a safe and reputed courier service and gives you insurance coverage for your asset during transit.

Why do gold prices keep changing

The gold price in Chennai keeps on changing due to various local and global factors. Any change in the global gold market affects the price of gold in Chennai such as changes in demand, economic conditions, geopolitical events, or currency movements.  
The exchange rate between the Indian Rupee (INR) and other major currencies, particularly the US Dollar (USD), has a direct influence on the gold price in Chennai. Local demand and supply also play an important factor such as festivities, cultural traditions, wedding season, etc. Government policies and taxes, such as import duty, customs etc also affect the price of gold in Chennai. Most of the jewellers in Chennai are part of the Madras Jeweller and the diamond association where the gold price is set twice a day, before buying the customer can check the price and negotiate accordingly. These are a few reasons why gold prices keep changing in Chennai.

How is the Gold Rate determined

The gold rate in Chennai is determined by various factors. The rate of customs duty on gold imports, currently at 18.45%, affects the gold rate. Currency fluctuations, especially the exchange rate between the Indian Rupee and the U.S. Dollar impact gold prices as gold is traded in USD globally. The gold reserves held by the Reserve Bank of India play a role in determining gold prices, as increased buying by the central bank reduces the supply of gold in the domestic market. Geopolitical factors and uncertainties can increase the demand for gold during times of financial or geopolitical instability. Additionally, Crude oil prices are another factor, as gold and crude oil prices tend to have a positive correlation. 

Taxation on Gold Rates in Chennai

Gold in India is subject to taxation either on purchase or on sale.
There are two main taxes related to gold:

• Goods and Services Tax (GST): From July 2017, when you purchase gold, you have to pay Goods and Services Tax (GST). Right now, the GST rate for gold is 3%. This tax is added to the total value of the gold you sell, including any extra charges.
• Income tax or Capital Gains tax: The tax on the profit when you sell gold depends on how long you've owned it. If you sell gold within three years of buying it, any profit you make is called short-term capital gains. The amount of tax you have to pay depends on your income tax rate. If you sell gold after owning it for three years or more, any profit you make is called long-term capital gains. Presently, the tax rate for long-term capital gains on gold is 20% with indexation.

Factors affecting gold rates in Chennai

• Physical demand for Gold: In India, the Indian Bullion and Jewellers Association will fix the prices of gold. 
  The association determine rates based on the following factors:
  1. The rates are fixed by the biggest dealers in the city.
  2. The local import duty is added to the import items.
  3. The price is based on the formula of the futures market of the Multi Commodity Exchange.
• Demand and Supply of Gold: The Demand and the supply of gold affect the prices. Purchasing physical gold provides the most direct exposure to the gold. Gold may be demanded for ornamental purposes or investment purposes. Chennai is home to a large number of buyers and sellers. The prices increase due to supply constraints.
• Deterioration of mining activity: The volume of gold mined in India, since 2013, has remained below two metric tons. The demand for gold in India is principally met through imports. India is one of the leading importers of gold.
• Currency fluctuations: It also influences the price of gold. Gold is traded in US Dollars in the international market. The rupee-dollar conversion impacts price.
• Central Bank policies: Central Bank also do the sale and purchase of gold and holds reserves of gold which affect the price of gold in the market.
• Bullion association: Bullion associations in Chennai, like the Madras Bullion Association, influence the gold price by setting standard rates and providing transparent pricing information to their members.
• Interest rate: Interest rate and gold price have an inverse relationship with each other, with an increase in interest rate people prefer to sell gold while with a decrease in the interest rate they buy gold.