How Gold Price Determined In India

Us dollar gold rates are heavily dependent on how the us dollar performs with prices inversely proportional to dollar rates.

How gold price determined in india. During a period of inflation the rate of gold generally increases. Other factors determining rate of gold. That s because during inflation a currency s value lowers.

The points mentioned above also explain how gold acts as a currency. This is an average of the prices obtained on that day from ten large gold dealers some of these dealers use the near month gold futures contract on the multi commodity exchange of india mcx others provide. As a global currency the price of gold changes on a day to day basis and can vary from state to state and even jeweller to jeweller.

This relationship arises from the fact that gold is an internationally traded commodity and the us dollar is the preferred international currency. Hence the gold price calculation formula for 10 gm international gold price x usd to inr rate conversion x 10. Gold prices are fixed on a daily basis.

Starting from the london bullion association s spot price to custom duties to making charges here is a close look at the various factors that influence how gold price is determined in india. Quoted unit for gold in mcx exchange is 10 gms. But the gold price announced daily by the indian bullion jewellers association ibja is recognised by gold dealers across the country.

In india gold prices are not determined through a formal exchange. As such most of the gold used in india is imported making import duties an important factor in determining gold prices in the country. There is no single authority in india that sets a standard nation wide gold price.

There s a simple formula that factors these effects and calculates the price of gold. The lbma gold price is an important reference price for the market used globally by various participants. Just as geopolitical tensions in india can affect the price of inr global conditions can impact the 1 gram gold rate in india today.