Understanding Correlation between Indian Rupee and Gold prices

by Bhaveek Patel · 12 comments

in Gold

Gold and Indian Rupee has a very unique correlation, In this article I will explain how Indian Rupee movement impact Gold prices. Traders have a habit of buying gold whenever there is inflation in the economy, so in other words, Gold act as inflation hedge for many big traders. So when you see inflation in Indian economy then surely there will be buying in Gold.

Another instance of buy into gold is, when Indian rupee depreciates i.e. when it looses it value. Everything in country gets costly and so is the case with gold. Hence, gold will become costly and so traders buy into gold for this reason. Other than these two factors, demand and supply also contributes to the prices of gold. Demand for gold generally increases in festive season of Diwali and on the beginning of marriage season.

Example: If international gold price is going up; in India if INR (Rupee) depreciates against us dollar then, we are going to see gold price quoted in Indian rupees will go higher by higher percentage when compared to international prices.

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{ 12 comments… read them below or add one }

1 Subhash rai

Sir i want your view on silver.


2 Karan Jain

Good explanation Bhaveek, I have been reading your articles for about 6 -7 months. I am stock trader but also trade commodities like crude, copper, gold and silver


3 sujith

sir i am long on usd/inr yesterday it was at 55. What is next week target?


4 harshad patel

Bhaveek bhai your article for nifty future and nifty options are not coming. Kya baat hai bhai, eagerly waiting for your trading ideas on nifty futures.
Harshad Patel


5 harshad patel

Bhaveek bhai is there any stock for short term delivery? will appreciate if you share a midcap stock.


6 Kshitij Humane

Sir, recently demand for gold in Indian has come down so is it the reason for recent fall in gold and silver prices? What do you think??


7 paul

Bhaveek, I am a regular reader of your blog I have also done your technical analysis course. It has improved my trading analysis. But now I am planning an investment in forex and would like to try you forex accounts management service. How can we proceed further? Kindly call or mail me the details.


8 ask

Sir, I want only nifty options tips by sms. What is your charge for 1 month do you give any trial. I also have shares in delivery, can you help me, which shares I should buy.





10 pranil

usdinr 54.20 soon……


11 Vidushi Goel

Can anybody tell me, Why IT sector has an inverse effect on whole market?


12 Bhaveek Patel

Because rupee is getting stronger and all IT companies revenues comes in USD. so they get less rupees for every USD.


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