“A study on impact of Repo rate and exchange rate of USD with INR on the

price of Gold”

Synopsis submitted to the Bangalore University in partial fulfillment of the

Requirements for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION

BANGALORE UNIVERSITY

SUBMITTED BY

Rakshith S V
Register No.: 18CQCMD106

UNDER THE GUIDANCE OF

PROF. Sarah Merlyn

Assistant Professor
GUIDE REG. NO: 17CQFG001

DAYANANDA SAGAR COLLEGE OF ARTS, SCIENCE & COMMERCE

SHAVIGE MALLESHWARA HILLS, K.S. LAYOUT, LAYOUT, BANGALORE – 560078

Academic Year- 2017-2019
1.TITLE
A study on impact of repo rate and exchange rate of USD with INR on the
price of Gold.
2.INTRODUCTION

Gold is most popular as an investment. Investors generally buy gold as a hedge or harbor
against economic, political, or social fiat currency crises.
Repo Rate is that rate at which the commercial banks borrow money from the RBI. It is a
good measure to control inflation. When the repo rate will be high, the borrowing from the banks
will be low which will actually reduce the purchasing power of the public. This will reduce the
investment in gold and it will ultimately reduce the price the gold. Increase in repo rate makes
borrowing a costly issue for businesses and industries, which in turn slows down investment and
money supply in the economy.
The reverse relationship between the value of U.S. Dollar and that of gold is one of the most
discussed about relationships in currency market. Dollar is an internationally accepted currency
and most of the international transactions takes in dollar equivalent. The major reason behind the
relationship of gold and USD INR exchange rate is that gold is used as a verge against the
adverse exchange value decreases. As the dollar’s exchange value decreases, it takes more INR
to buy gold, which increases the value of gold.

3.OBJECTIVES
1. To study and analyze the commodity market of selected non-agricultural product i.e. Gold
2. To identify the factors on prices of gold relies on.
3. To analyze the significant impact of repo rates and US dollar value on gold prices.

4.STATEMENT OF THE PROBLEM

The prices of gold is more dynamic in the present scenario. The main reason for investors to
invest in gold is to get higher returns by investing feasible amount. But there are many financial
risks involved in this. So, it has become one of the problems for investors to recognize effective
financial path.
5.NEED FOR THE STUDY
The investment is very important for economic development of the country. There are many
risk factors which affect the investment decisions of an investors in gold. The need for the study
is to get the clear picture on which factors the gold price variations relies on. As Gold
Commodities are more sensitive in the market, their price prediction is a difficult job. Thus, there
is a need to study the present scenario of the performance of the non-agricultural commodities in
Indian stock market.

6.SCOPE OF THE STUDY

Scope of this study is to propose and understanding the impact of repo rates and US dollar
value on the price level of investment decisions on gold by the investors. The findings of this
study would have important implications for the investors who are likely to invest on gold to
earn profits in future.

7.RESEARCH METHODOLOGY
Research methodology is the direction used to systematically resolve the research problem. It
is a scientific way of studying how research is done scientifically, approved by the researcher in
reviewing the research problem alongside with the reason behind study. It is essential for the
researcher to differentiate not only the research methods and procedures but also the
methodology.
The type of research carried out for the study are descriptive and casual. The data required
for the study is collected from the secondary sources such as internet, journals and other related
research articles.

Sample size: Here in this study three commodities are selected as samples and they are
1. Gold prices
2. U.S. Dollar value
3. Repo Rate
 Tools and Techniques:
A comparative analysis of various factors has been done on the various parameters like
trend analysis, Mean and correlation to make possible the tedious task of analysis of these
factors. Further analyzing the factors will advise the investors that whether it will be profitable
for the investors to invest in gold or not.

Plan of analysis
CHAPTERS NO OF DAYS FOR SIGNATURE
ANALYSIS
Introduction and literature 15 days
of survey
Research design and Profile 10 days
of respondents
Data analysis, findings, 20 days
suggestions and conclusion.

Rakshith S V Prof. Sarah Merlyn

(USN no: 18CQCMD106) (Guide Reg.no: 17CQFG001)
Signature of Student Signature of Guide
 Registration Form

1. Name of the Student: Rakshith S V

2. Registration No: 18CQCMD106

3. Name of the Organization: NA

4. Proposed project area: Finance

5. Proposed project topic: A study on impact of repo rate and exchange rate of USD with
INR on the price of Gold.
6. Write a brief note on your topic: (Minimum 100 words)
Investors can succeed in their investment only when they are able to select the right
commodity at right time. This paper is basically focused on the factors like exchange rate of US
dollar with INR, repo rate and inflation rate. Each of the factors is studied with the gold prices.
The relationship between the factor and the gold prices is emphasized in this paper. There exists
an inverse relation between the USD and Gold prices. Gold prices and repo rates are
interdependent. Gold prices and inflation rates are also dependent and positively correlated. The
findings of this study would have important implications for the investors who are likely to
invest on gold to earn profits in future.

Student’s signature
Approved or disapproved
If it is disapproved the reason for revision

……………………………………………………………………………………..

Faculty guide’s signature with date