Gold holds a special place in the hearts of people globally. It has been revered for millennia for its beauty, rarity, and intrinsic value. In India, the term “sona ka bhav” is commonly used to refer to the price of gold. Understanding the value of gold, and how it is determined, is essential for both investors and consumers alike.

What Affects the Price of Gold?

Gold prices are influenced by a myriad of factors. Some of the key determinants include:

1. Supply and Demand: Similar to any other commodity, the price of gold is impacted by the principles of supply and demand. Factors like mining output, central bank policies, and consumer demand all play a role.

2. Inflation: Gold is often seen as a hedge against inflation. When fiat currencies lose value due to inflation, investors flock to gold as a store of value, driving up its price.

3. Geopolitical Tensions: Uncertainty and geopolitical tensions often lead to an increase in the demand for gold as a safe-haven asset, consequently driving its price up.

4. Interest Rates: Gold, as a non-yielding asset, competes with interest-bearing assets like bonds. When interest rates are low, the opportunity cost of holding gold diminishes, making it more attractive.

5. Currency Movements: As gold is priced in US dollars, movements in the dollar value can impact the price of gold. A weaker dollar usually leads to higher gold prices, and vice versa.

How is the Price of Gold Determined?

The price of gold is measured in troy ounces, with one troy ounce equating to approximately 31.1 grams. The price is primarily set by the global gold spot price, which is the price at which gold could be bought or sold at that precise moment. This spot price is determined by supply and demand in the global markets and is influenced by factors mentioned earlier. Gold futures contracts also play a role in determining the future price of gold.

Forms of Investing in Gold

There are various ways to invest in gold, each with its own set of pros and cons:

1. Physical Gold: This includes gold coins, bars, and jewelry. While it offers the satisfaction of owning tangible assets, it comes with additional costs like storage and insurance.

2. Gold ETFs: Exchange-traded funds (ETFs) are a convenient way to invest in gold without holding physical gold. These are traded on stock exchanges and offer liquidity.

3. Gold Mutual Funds: Investors can also opt for gold mutual funds, where the fund invests in different forms of gold, like physical gold and gold ETFs.

4. Gold Mining Stocks: Investing in gold mining companies is another way to gain exposure to the gold market. However, these stocks are influenced by company-specific factors in addition to the price of gold.

Sonakshi’s Guide to Buying Gold

For Indian consumers, buying gold is not just an investment but also a cultural tradition. Here are some tips for buying gold wisely:

1. Purity: Ensure that you purchase gold of the highest purity. Look for BIS hallmark on gold jewelry as it certifies the purity of the metal.

2. Making Charges: Be mindful of making charges while buying jewelry. These charges can significantly impact the overall cost of your purchase.

3. Buyback Policies: Check the buyback policies of the seller. Knowing that you can sell back your gold at a fair price can provide peace of mind.

4. Research: Before making a purchase, research the prevailing sona ka bhav and compare prices from different jewelers to ensure you are getting a good deal.


Gold, with its timeless allure and universal appeal, continues to be a sought-after asset for investors and a cherished possession for many. Understanding the factors that impact the price of gold, how its value is determined, and the various ways to invest in it can help individuals make informed decisions when dealing with this precious metal.

Frequently Asked Questions (FAQs)

1. What is the difference between carat and karat when it comes to gold?

Answer: Carat is a unit of weight for gemstones, while karat is a measure of purity for gold.

2. Does the price of gold fluctuate daily?

Answer: Yes, the price of gold is subject to daily fluctuations based on various market factors.

3. Is gold a good investment during economic uncertainties?

Answer: Gold is often considered a safe-haven asset during economic uncertainties due to its stable value.

4. Can I buy gold online in India?

Answer: Yes, there are several reputable online platforms where you can purchase gold in various forms.

5. What is the role of gold in Indian weddings and festivals?

Answer: Gold is an integral part of Indian culture, often symbolizing wealth, prosperity, and blessings. It is commonly gifted and worn during weddings and festivals.


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