Understanding Correlation between Indian Rupee and Gold prices

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.

About Bhaveek Patel

Bhaveek Patel is a technical analyst and investor, his areas of interest includes stock market, forex, gold.


  1. Karan Jain says

    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

  2. harshad patel says

    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

  3. Kshitij Humane says

    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??

  4. paul says

    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.

  5. ask says

    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.

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