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Why gold is treasured in india
Gold is much more than a shiny metal in India — it’s a part of your culture, your traditions, and even your finances. From ancient times, gold has symbolised prosperity, purity, and divinity, making it a go-to choice for jewellery and religious rituals. When you attend weddings or festivals like Diwali and Akshaya Tritiya, gold is everywhere, representing wealth, status, and good fortune. It’s often passed down as family heirlooms, carrying stories across generations.
Historically, trade routes like the Silk Road brought gold into India, shaping markets and boosting commerce. Even today, gold serves as a hedge against inflation and currency fluctuations, giving you financial security while remaining deeply woven into India’s cultural fabric.
Facts about gold and properties of gold
Gold, represented by Au, is found in mineral veins and alluvial deposits all over India. It's sometimes a by-product of metals like copper and lead, but there are also specific gold mines. Interestingly, finding a single one-ounce nugget is rarer than finding a five-carat diamond.
Gold's appeal lies in its softness to the touch, substantial weight, and remarkable durability. It doesn't corrode or change over time, believed to originate from exploding stars. Gold conducts heat and electricity well and can be stretched into thin wires or hammered into sheets. To make it stronger, gold is often mixed with metals like silver or copper, with purity measured in carats, where 24 means pure gold and 18 means an alloy with 75% gold.
Here's how properties of gold contribute to making it invaluable in the jewellery market:
- Durability: Gold's resistance to corrosion and tarnishing ensures that jewellery made from it retains its beauty and luster over time, even with frequent wear and exposure to various elements.
- Malleability: Gold's exceptional malleability allows jewellers to shape it into intricate designs and delicate patterns without the risk of it cracking or breaking. This property enables the creation of detailed and elaborate jewellery pieces.
- Ductility: Gold's high ductility enables it to be drawn into thin wires or threads, which can be woven, twisted, or braided to create intricate chains, bracelets, and other jewellery components.
- Conductivity: While not directly related to aesthetics, gold's excellent conductivity makes it easy to work with during the jewellery-making process. It allows for efficient soldering and welding techniques, ensuring that jewellery pieces are securely assembled.
- Lustre: Gold's brilliant lustre adds to the overall beauty and appeal of jewellery. Its reflective surface enhances the sparkle of gemstones and accentuates the intricate details of the design, creating stunning and eye-catching pieces that stand out.
Why is gold more valuable than silver and copper?
Gold is more valuable than copper or silver due to its rarity, unique properties, and historical significance. Unlike copper and silver, gold is much scarcer in the earth's crust, making it inherently more precious. Its exceptional durability and resistance to tarnish and corrosion ensure that gold retains its luster and appeal over time, unlike silver, which can tarnish, or copper, which can corrode.
Culturally and historically, gold has held a significant place as a symbol of wealth, power, and status across civilizations. Its use in currency, jewelry, and religious artifacts has cemented its reputation as a superior metal. Economically, gold serves as a stable investment and a hedge against inflation and economic instability, further enhancing its value. Additionally, gold's malleability, ductility, and excellent conductivity make it highly desirable for various industrial applications, from electronics to aerospace, contributing to its higher market value compared to copper and silver.
Quick tip: Wondering how much you can borrow on your gold? Just check your gold loan eligibility—it takes seconds and minimal paperwork!
What are the uses of gold?
Gold has diverse uses spanning various industries due to its unique properties:
- Jewellery: Gold's lustre, malleability, and resistance to tarnish make it ideal for crafting intricate and durable pieces, making it a timeless choice for jewellery.
- Electronics: Its excellent conductivity is invaluable in the electronics industry, where it is used in connectors, switches, and other critical components.
- Finance and Investment: Gold is a safe-haven asset, often used to hedge against economic instability and inflation. It is widely traded and held by central banks and investors.
- Medicine: Gold compounds are employed in treatments for conditions like rheumatoid arthritis, and its biocompatibility makes it suitable for dental implants and medical devices.
- Aerospace: Gold is used for coating satellite components and spacecraft, reflecting infrared radiation and stabilising temperatures.
- Gold's aesthetic appeal also finds use in high-end luxury goods, awards, and decorations, symbolising prestige and achievement.
What affects the price of gold?
Numerous factors drive the price of gold, many of which are interconnected. As a safe haven asset, gold is less exposed to market or political factors like foreign exchange or other commodities, making it attractive during periods of market volatility.
Key factors affecting gold prices:
- Geopolitical events: Trade tensions, conflicts, and government changes can cause investors to seek the safety of gold, driving up its price.
- US dollar value: A weaker dollar generally results in higher gold prices since gold is traded internationally in dollars.
- Inflation: Higher inflation often leads to central banks increasing the money supply, making gold a more attractive investment.
- Interest rates: Lower interest rates make gold more appealing compared to other investments like savings accounts, whereas higher rates can decrease gold's appeal.
- Supply and demand: Increased buying when prices fall and decreased demand when prices rise also influence gold prices.
These factors feed into broader drivers such as economic data and monetary policy, impacting the gold price's fluctuations. It's important to note that the correlation between gold prices and these drivers isn't always consistent, as the price is swayed by various variables that investors must consider.
As gold prices change with global trends, knowing your borrowing capacity can help you stay prepared. Check your gold loan eligibility to know how much you can borrow today.
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Latest RBI updates
Section | Parameter | Applicable Details |
Eligibility Criteria | Gold purity accepted | 18-22 Karat for jewellery and ornaments |
24 karat for gold coins | ||
Eligible collateral types | Gold ornaments, jewellery, and coins | |
Eligible limit for each collateral type | Ornaments | Total pledged weight across all loans must not exceed 1 kilogram |
Gold coins | The total weight of gold coins pledged cannot be more than 50 grams. | |
Gold Jewellery | As per maximum loan amount. | |
Overall exposure limit | The total loan exposure across ornaments, jewellery, and gold coins together must not exceed the maximum loan limit of Rs. 2 crore. | |
Collateral protection
| Any loss, damage, or discrepancy in the quantity or purity of your pledged gold identified during audit, return, or auction will be recorded and promptly communicated to you or your legal heirs. The reimbursement or compensation process, as per company policy and SOP, will be clearly explained. Delays in collateral release due to lender fault will attract compensation of ₹5,000 per day. | |
Gold loan renewal | Renewal parameter | You can request renewal of your gold loan before maturity if it remains in standard status and within permissible LTV limits. This facility is available only to existing customers. For bullet repayment loans, accrued interest must be cleared. Renewals are subject to credit checks, fresh applicable charges, and are not allowed after maturity. |
Gold loan top up | Top up parameter | Top-up is allowed before maturity, subject to regulatory LTV limits, credit assessment, and customer eligibility. Fresh fees and charges apply. Top-up after maturity is not permitted, even if dues are outstanding. Top up facility is available only to existing users. |
LTV (Loan to Value) | For loans up to Rs.2.5 lakh | 85% |
For loans between more than Rs.2.5 lakh to Rs.5 lakh | 80% | |
For loans from more than Rs. 5lakh to Rs. 2 crore | 75% | |
Gold Value | Evaluation parameter | As per the latest guidelines, gold loans are offered against specific purity of gold jewellery, ornaments and gold coins, valued using lower of the average closing price for your gold's specific purity over the last 30 days or the previous day's closing price, as published by IBJA or a SEBI-regulated commodity exchange, within prescribed limits and subject to KYC and timely repayment. |
Is now a good time to buy gold?
Deciding whether now is a good time to buy gold depends on several factors. If economic uncertainty, inflation, and geopolitical tensions are high, gold can be a safe haven investment, preserving value. Current low interest rates might also make gold more appealing. However, consider the gold price trends and market conditions. If gold prices are at a peak, it might be better to wait for a dip.
In addition to buying gold, you can also consider gold loan as a reliable financing option. Gold loans allow you to leverage your existing gold jewellery to meet financial needs without parting with its ownership.
Understanding the fluctuations in gold rates is crucial for borrowers to maximise their loan amount and make informed decisions about pledging their gold.
Diversifying investments and consulting with financial advisors can provide tailored advice, making gold a wise addition to a diversified portfolio.
Have idle gold lying at home? Turn it into instant funds with a Bajaj Finserv Gold Loan today! Apply now
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Bajaj Finance Limited (BFL) has the sole and absolute discretion, without assigning any reason to accept or reject any application as per BFL policy. *