Gold Rate Today in Pondicherry

Puducherry is a Union Territory on India’s east coast. Famed for its golden beaches, picturesque beauty and its seaside promenade, this popular destination is a short drive away from Chennai. Known as the “French Riviera of the East,” it comprises the former French establishments Puducherry, Karaikal, Mahe, and Yanam.

 In 2006, Pondicherry was renamed Puducherry to reflect its original name more closely, which most of its residents use. In contrast, outsiders or foreigners usually refer to ‘Pondicherry’. As in most parts of India, gold and gold jewellery have always been significant types of investment in Puducherry. A large number of jewellery showrooms testify to the importance of gold in the local culture and traditions.

The gold rates in Puducherry depend on various factors, such as the supply and demand of gold, increasing inflation, and US dollar value. There has been a significant increase in the last year due to international gold rates, fluctuations in US dollar exchange rates, and important international events. The beginning of festivals like Diwali, Dhanteras, and Dussehra, as well as the wedding season, have all led to a spike in gold prices.

Hallmarked Gold in Pondicherry

Bureau of Indian Standards (BIS)-certified gold is referred to as hallmarked gold. Hallmarking assures the buyer that the gold purchased adheres to purity standards.

The BIS is the sole agency recognised by the Government of India for hallmarking gold jewellery in India. Most of the top jewellery outlets in Puducherry sell BIS-hallmarked gold. The hallmark seal consists of the following elements:

(a) BIS logo

(b) Purity in karat and fineness

(c) Six-digit alphanumeric HUID

Factors Affecting Gold Prices in Puducherry

Several factors impact the rates of gold in Puducherry. Some important ones are:

(a) Demand and Supply. During times of high demand, such as during the wedding season and festivals like Diwali, Dhanteras, and Dusshera, the price of gold increases significantly due to high demand.

(b) Inflation. When inflation rises, the value of the Indian currency falls. This leads people to invest more in gold as a hedging tool against inflationary conditions.

(c) Import duties. Since most of the gold in India is imported, the import duties imposed on the purchase of gold affect its price in the local markets.

(d) Fluctuations in the dollar rate. Since the majority of global transactions are completed in US dollars, every change in the dollar's exchange rate has an impact on the Indian rupee, which raises the cost of importing gold.

(e) Geopolitical factors. Geopolitical factors that create crisis-like situations have a positive effect on gold prices because gold outperforms other asset classes and serves as a safe haven.

Alternatives to Physical Gold

Gold has traditionally been a component of most people's investing strategies due to its demand and long-term value growth. Traditional investments were in the form of jewellery, coins, and bars. However, several new forms of investment in gold in Puducherry have become popular. They are as follows:

(a) Gold Mutual Funds. Gold funds are known as mutual funds that invest directly or indirectly in gold reserves. The most common types of investments are in the equities of mining firms and physical gold.

(b) Sovereign Gold Bonds (SGBs): SGBs are government securities issued by the Reserve Bank of India as substitutes for physical gold and denominated in grams of gold. The issue and redemption of these bonds are done in cash.

The Bonds pay interest at a rate of 2.50 percent (fixed rate) annually on the initial investment amount. The investor's bank account will receive interest credits twice a year, with the final interest payment due at maturity along with the principal.

(c) Gold Exchange-Traded Funds (ETFs): ETFs are a good investment option. They are traded on the stock exchange, effectively eliminating problems of safe storage and the risk of theft. One unit of gold ETF equals one gram of gold having 99.5% purity. The units can be purchased and redeemed for cash when they mature within a specific period of time.

Purity Levels for Gold in Puducherry

• Gold's purity is expressed in karat (K). Gold having 99.9% purity is referred to as 24 karats or 24K.
• 22K refers to gold with a purity level of 91.7%, 18K refers to a purity level of 75%, 14K corresponds to 58.3%, and 10K to 41.7%.
• Thus a higher karat value indicates greater purity. Copper, nickel, and silver are mixed in varying proportions to form lower-purity alloys with varying properties and applications.
• 24K gold is the most malleable and ductile form of gold. However, its purity makes it highly prone to scratches and dents, and it cannot securely hold gemstones or sustain heavy wear and tear. Therefore, gold jewellery is usually made in 22K and 18K gold.
• Several jewellery stores in Puducherry offer a wide choice of options in 22K and 18K gold. However, as purity levels drop to 14K and 10K, affordability, hardness, and durability improve.