Does India's Wedding Season Drive Up Gold Prices?

Gold prices have shown an upward trend since the beginning of 2017. Furthermore, the upcoming wedding season in India, which is predicted to boost demand for this precious metal, could push gold prices even higher.

On March 20, 2017, gold prices closed up 0.4 percent at US$1,234.33 per troy ounce, compared to the previous day's closing price. As a result, compared to the end of 2016, gold prices have risen by 7.12 percent. Meanwhile, the price of 1 gram of gold bars on logammulia.com is listed at Rp 585,000 per gram, and 10 grams are priced at Rp 5,500,000 per gram.

The planned interest rate hike by the US Federal Reserve (The Fed) and uncertainty in the global financial market have supported the rise in gold prices throughout 2017. The depreciation of the US dollar against major world currencies following the Fed's announcement of a 25-basis-point interest rate hike also supported gold's movement. The weakening US dollar makes gold cheaper for investors holding other currencies such as the euro, pound sterling, yuan, rupee, and other world currencies. In addition, elections taking place in several European countries such as France, Germany, and Italy, could increase global uncertainty and trigger a rise in gold prices.