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The price of physical gold has crashed sharply in the last seven days in India. The price of this precious metal declined by more than Rs 1,000 per 10 gm across all major cities in the country.
Gold prices vary across India. There is no regulator of gold prices.
The bullion associations mostly decide day-to-day gold prices in the different states or cities. Though there is no sound reason for the price to vary from city to city, the price does vary on the ground every day.
Metro cities
In New Delhi, the price of 24-carat gold fell by Rs 1,500 to Rs 50,300 from Rs 51,800 per 10 gm while in Kolkata. it decreased by Rs 1,300 from Rs 49,100 to Rs 47,800.
In Mumbai, the rate fell by Rs 1,184 to Rs 47,161.
The price of 24-carat gold in Chennai was also down by Rs 1,520 to Rs 48,380 from within a week per 10 gm.
Other cities
Sharp declines were also noticed in other big cities such as Hyderabad, Bengaluru, Lucknow and Chandigarh too.
India is the biggest consumer of gold jewellery in the world and imports almost all of its gold requirements. The gold imports during the month of March, 2021 stood at 160 tonnes.
Gold pricing
Though gold is imported only through government licensed agencies — most of them banks — there is no regulatory authority that can decide the retail and wholesale prices in the domestic market.
The macro factors that determine the prices of gold are demand and supply, inflation, import duty, GST, rupee-dollar exchange rate, rise of prices in the global market, uncertainty in the political/social climate etc. GST and other local taxes are levied by the state government which varies from state to state.
COMEX (a division of the Chicago Mercantile Exchange) is the world’s most prominent benchmark futures contract for gold prices.