Gold prices in Chennai bounce back after slight dip

CHENNAI: The yellow metal has regained its sheen and appears dearer for consumers in the city once again.

The gold rate in Chennai, which dipped on July 23 on the day of the union budget, has bounced back to the pre-budget level in just 53 days.

The visible decrease in the rate after the budget saw the metal cost Rs 6,550 per gram, and one sovereign cost Rs 52,400. Consumers enjoyed the dip in price, which was lesser by Rs 2,200 per sovereign.

Meanwhile, on Monday, gold in Chennai stood at Rs 6,880 per gram and silver was Rs 98 per gram.

According to market sources, the rate of gold per sovereign was Rs 55,040 and a kilogram of silver was priced at Rs 98,000. The cost of 1 gram of pure gold (24K) on Monday was Rs 7,335 and 10 grams cost Rs 73,350.

"The decrease and increase in gold rate is normal in India and it doesn't have any connection with the current increase in price. There is a difference in the Indian and international gold rates. The rate increase is due to the US interest rate cuts. On Wednesday there is a US Federal policy meeting which is anticipated to revise the prices," said Sachin Jain, Regional CEO of World Gold Council.

"The gold consumption in Tamil Nadu is around 30 to 35 per cent of India. It shows that even if the rate increases still there is a huge demand for gold among Tamil Nadu consumers. The increase in the gold rate is due to geopolitical conditions and global reasons. As the federal bank interest was reduced the depositors are withdrawing money and are investing in gold increasing gold rates," said Jayantilal Challani, president of the Jewellers and Diamond Traders Association of Madras.

It may be noted that in the union budget, the Union Finance Minister Nirmala Sitharaman had declared a reduction in customs duty for gold and silver from 15 per cent to 6 per cent. The rate of silver also came down to Rs 92.50 per gram on the day of the budget.