Gold Rate Today in Kerala

Gold has always been an attractive investment option for people in Kerala, and it is deeply ingrained in the state's culture and tradition. For generations, people in Kerala have viewed gold as a safe and stable investment.

People often prefer to hold onto it as a store of value instead of investing in other financial instruments.

Difference Between 22-Karat And 24-Karat Gold

The primary difference between 22-karat and 24-karat gold is the amount of pure gold present in the alloy. Both are forms of gold that are commonly used in jewelry, but they differ in terms of their composition and properties.

24-karat gold is considered the purest form of gold, as it contains 99.9% gold and 0.1% other metals, such as copper or silver. 24-karat gold is generally too soft and malleable to be used in jewelry or other decorative objects, which is why it is often alloyed with other metals to make it stronger and more durable.

22-karat gold, on the other hand, contains 91.67% gold and 8.33% other metals. It is an alloy that is more durable and harder than 24-karat gold, making it suitable for use in jewelry and other decorative objects. The other metals that are added to 22-karat gold can vary, but they typically include copper, silver, and zinc.

Factors Affecting Gold Rates in Kerala?

In Kerala, gold prices are determined by a variety of factors, such as the following:

International Factors: One of the primary factors influencing the price of gold in Kerala is the international price. The gold supply also depends on the imports of gold from other countries, as there is no gold mining activity in the state.

Local demand and supply: The local demand and supply of gold also play a significant role in determining the price of gold in Kerala. 

Seasonal Demand: The demand for gold is driven by other factors, including weddings, festivals, and religious occasions, which typically see a surge in demand for gold jewelry.

Currency fluctuations: Gold is a highly tradable asset in the international market that happens in the US dollar. so when the value of rupees fluctuates against the dollar, the same gets reflected in the gold rates.

Jewellery Market: Gold dealers and jewelers in Kerala also play a role in determining the price of gold, as they add their markups to the international price of gold. They do so to cover their costs and profit margins. The price of gold jewelry, for instance, is generally higher than the price of gold bullion or coins, as jewelers add the cost of manufacturing, designing, and other overheads to the price of the raw gold.

Inflation: Inflation is a condition when currency values go down. in that case, people put money into gold as a hedge against inflation. due to this gold prices changes.

Reserve Bank of India (RBI) policies: RBI buys and sells gold in large quantum that brings a change in the rates.

Import Duty: Being largely dependent on imports, the Indian government put an import duty on gold. When the import duty changes, that automatically translates into a gold rate price change.

Correlation with other investment options: To minimize the risk, people look for diversification which means investing in different investment options. So when the other option goes down, people switch over to gold which brings high demand. that is the reason, gold rates rise when the share market goes down. 

How To Test The Purity Of Gold In Kerala?

Here are some of the methods to test the purity of gold in Kerala:

Method - 1 Acid Test

• Scratch the gold against a testing stone.
• Apply a drop of nitric acid to the scratch.
• Observe the reaction of the acid. 
• If the gold dissolves completely, it is not pure.

Method- 2 Specific Gravity Test

• Weigh the gold on a scale.
• Fill a graduated cylinder with water.
• Place the gold in the cylinder and measure the change in water level.
• Calculate the specific gravity of the gold, which can be used to determine its purity.

Method - 3 Fire Assay

• Take a small sample of the gold and mix it with lead and other metals. 
• After that, heat the mixture in a crucible to a high temperature.
• If you do so, gold gets separated from the other metals. Afterward, you can weigh the gold to determine its purity.

The Impact Of GST On Gold Rates

Implementing the Goods and Services Tax (GST) in India has significantly impacted the gold industry, which in turn affects the price of gold. 

Increased tax rate: Before the implementation of GST, gold was subject to a Value Added Tax (VAT) of 1-1.5%. However, under GST, the tax rate for gold was increased to 3%, which led to an increase in the price of gold.

A decline in demand: The higher tax rate for gold has led to a decline in demand, as some consumers opt for alternative investments that are not subject to the same tax rate. 

Impact on gold imports: India is one of the world's largest consumers of gold, and the implementation of GST has impacted the import of gold into the country. The higher tax rate for gold has made imports more expensive.

Negatively impacted the small businesses: Some small businesses that deal in gold have been negatively affected by the higher tax rate under GST, as it has increased their operating costs. This could lead to a decrease in the availability of gold, which could push prices higher.

Why Gold Is  A Popular Investment Option In Kerala?

Here are the reasons why gold is a popular investment option in Kerala:

Cultural Significance

Gold is deeply ingrained in Kerala's culture and traditions. Gold jewelry is an essential part of the wedding rituals and other religious ceremonies in the state. This cultural significance has led to a strong emotional attachment to gold among the people of Kerala, making it a popular investment choice.

Inflation Hedge

Gold is often seen as a hedge against inflation, which is a significant concern for many investors. As the value of the currency declines, the price of gold tends to rise, making it a popular investment during times of economic uncertainty.

Portfolio Diversification

Investing in gold can help to diversify an investor's portfolio, reducing overall risk. This is because gold has a low correlation with other asset classes, such as stocks and bonds, meaning that it can provide a level of stability during periods of market volatility.

Liquidity

Gold is a highly liquid asset, which means that it can be easily converted into cash. This is an essential factor for investors who may need to access their investments quickly in times of financial emergencies.

Easy Accessibility

Kerala has a thriving gold jewelry industry, with many local jewelers offering a variety of gold products to meet the demands of investors. This makes it easy for people in Kerala to buy and sell gold, often at competitive prices.