India does not have any gold reserves, and hence, does not produce the precious yellow metal that each Indian is desperate to own. Hence, Gold is imported into India from various producing nations. With Imports come the various import duties, taxes and transportation costs that are levied to gold and increase its price substantially. For investors of gold in India, the often-baffling question is the constantly changing prices of gold and the difference in gold price in India. Bullion India evaluates the factors that determine the rate of gold and its varying prices within India.
What affects the price of gold within India?
The Imports:
As briefly explained earlier, gold is not mined within India, however, owing to its grave demand, gold is imported to the country, which means implication of taxes, duty and imposed transportation costs the gold prices are inflated until it reaches the country. This augments <gold rate India, increasing it substantially from the global rates. India is the second largest importer of gold year to date, importing more than 984.5 tonnes of the precious metal in 2015.
Large Nation:
There is no doubt India is a large country, with extremities that are inland and many areas difficult to access. The transportation of gold from the ports towards the inland regions levies another handling charge onto the existing high gold price in India. This means gold rate in Mumbai, which is a port, and the gold rate in Chennai, which is also coastal, will be substantially lower than Delhi, Rajasthan and other inland cities.
The Demand:
Metropolitan cities see a higher demand and buying power for gold than rural regions and villages due the access to higher wages. Increasing the prices in such regions due to the lower reserves and higher demands.
Higher Jeweller’s Premium:
Once the gold prices in India are set by the MCX, jeweller unions update their selling and buying prices of gold once or thrice throughout the day. To this price, a jeweller’s premium is added depending upon the facility and service provided. Larger jewellery stores may levy higher charges due to their name and better jewellery designs.
State Taxes and Regulations:
Within India, state governments and the central government are entitled on adding taxes and duties onto the yellow metal. New and upsurge of taxes affect the prices adversely.
Rest of the World.
Instability of foreign governments, debts, rising dollar prices all affect the gold price in India. As gold is often purchased as a hedge against currencies, when currencies falter, gold prices rise considerably owing to their sudden influx in demand and purchase.
Often the underdeveloped countries where gold is usually mined face turmoil, mining problems, inability to meet the growing demands, which indirectly affect the gold prices globally, and hence increasing the gold price in India.
Gold is a commodity that sees a lot of affection from the Indian masses. The demand for Gold Bullion in India, in the form of jewellery or gold bullions, is undying. Bullion India offers steady spot prices to online buyers, which are unanimous throughout the country, easily accessible on our website. Providing one the best prices for gold purchases along with effective payment options for their needs.