Gold has long been a symbol of wealth and beauty but is also a valuable financial asset. A Gold Loan can be a practical option when you need quick cash for emergencies or liquidity needs. Instead of selling your gold, you can pledge it as collateral to secure a loan from a financial institution. Gold Loans typically come with lower interest rates than personal loans due to the collateral provided. In order to understand how banks determine the amount they will lend against your gold, it's crucial to grasp the concept of gold price per gram and its influencing factors.
The amount you can borrow through a Gold Loan largely depends on the gold price per gram, which is influenced by the current market rate of gold. This price is not fixed and fluctuates based on various factors, including market conditions and gold valuation norms.
The price of gold is determined daily by key financial institutions. The London Bullion Market Association (LBMA) sets the price twice a day, at 10:30 AM and 3:00 PM London time. The prices are quoted in three major currencies: the US Dollar, the Pound Sterling, and the Euro.
Gold prices are categorised into two types:
Over-the-counter (OTC) markets are decentralised platforms where securities, including gold, are traded outside formal stock exchanges. Transactions are conducted via phone, fax, and digital means, and prices are determined through bilateral agreements among dealers. This market allows for confidential trades and is less regulated than formal exchanges.
Large banks and bullion traders handle substantial volumes of gold, and their trading activities help set spot prices. Their transactions provide a reliable indication of current gold prices due to the scale and frequency of their trades.
Futures prices are set on global exchanges where gold futures contracts are traded. Major exchanges include:
Several factors drive gold prices, including:
At HDFC Bank, we recognise the value of gold both as a personal asset and a financial security. Our Gold Loans are designed to help you efficiently leverage your gold's value. We offer competitive loan amounts starting at ₹25,000 with a swift disbursal time of approximately 45 minutes. The gold price per gram used in our calculations considers the gold's weight, value, and purity to determine the loan amount.
Explore the convenient Gold Loan offered by HDFC Bank and learn more about the application process by clicking right here.
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*Terms and conditions apply. Gold Loan at the sole discretion of HDFC Bank limited. Loan disbursal is subject to documentation and verification as per Banks requirement.