Gold prices in India generally follow global trends, as the country relies heavily on imports to meet domestic demand. However, despite being influenced by common macro factors like international gold prices, the US dollar’s movement, and bond yields, gold prices can vary significantly across different states and cities in India.
On November 18, for instance, gold prices showed slight differences between major cities. In Delhi, 24K gold was priced at ₹76,460 per 10 grams, while 22K gold was at ₹70,100 per 10 grams. In comparison, Mumbai saw 24K gold priced at ₹76,310 per 10 grams, and 22K gold at ₹69,950 per 10 grams. In Chennai and Kolkata, gold prices for both 22K and 24K varieties were similar at ₹69,960 and ₹76,320 per 10 grams, respectively.
Delhi typically has the highest gold prices due to a variety of local factors. The capital’s status as a financial hub, the presence of high demand, and various state-level taxes contribute to the premium on gold prices. The local demand for gold is strong, driven by factors such as festivals, weddings, and investment, all of which lead to higher prices.
In contrast, cities like Kerala tend to have relatively lower gold prices. This is due to several reasons, including the state’s high consumption of gold, the presence of numerous gold retailers, and lower transportation costs due to proximity to ports. Kerala’s strong cultural connection to gold also ensures a competitive market with relatively stable pricing.
Several factors contribute to the price variations across states, including:
- International Price Movements: Gold prices are largely influenced by global market trends, which affect all cities in India.
- Local Taxes and Duties: States impose varying taxes and duties on gold, which can raise or lower the price.
- Demand and Consumption: States with higher local consumption, like Kerala, may see lower prices due to economies of scale.
- Transportation Costs: Cities closer to ports, like those in Kerala, often have lower transportation costs, resulting in cheaper prices.
- Local Market Competition: The number of retailers and the level of competition also impact pricing in different regions.
Overall, while global factors set the baseline for gold prices, local dynamics and costs can cause notable price differences across Indian cities and states.
