Impact of Demonetization on Gold Imports and Gold Prices.

Abstract

Till now, gold has been used as money throughout history and has served as a relative standard for currency equivalents specific to economic regions or countries. Because India does not produce gold, more than 98 percent of the gold consumed in the country is imported. Imports have an impact on gold prices in the country, which is why the study was done. In the current study, a brief study on the India's gold import and its price changes before and after Demonetization. The reference period taken for this study was found to be 6 years from 2012-2019. And data for 2017-18 and 2018-19 after GST implementation is also analyzed. The Gold Monetization Scheme, it was discovered, had additional effects on the metal's values in India. The recent implementation of currency demonetization has resulted in a significant shift in gold prices and imports. It is done in Bangalore and is helpful for all i.e. importers, retailers, traders, manufacturers, customers, & also distributors in general. It was concluded that the actual reason behind the drop of gold price was because of 25 bps increase in Fed Rate & because of US dollar index strengthening from around 98 to 103 thus there was an equivalent negative impact on the gold price.