How gold prices are set in India

The rate your jeweller quotes is not the London gold price converted into rupees. India runs its own twice-daily benchmark, set from submissions by domestic market participants and published in rupees. The international price and the exchange rate push it around, but the Indian number is arrived at here, not imported.

Almost every explanation of Indian gold pricing gets this wrong, so it is worth walking the chain properly.

The international benchmark

Gold trades continuously, so the market needs an agreed reference point for settling contracts. That is the LBMA Gold Price, administered by ICE Benchmark Administration and struck twice a day by auction, at 10:30am and 3:00pm London time, in US dollars.

The auction is not a poll. It runs in 30-second rounds: a price is published, fifteen direct participants enter, change or cancel orders, and the system checks whether buying and selling balance. If the imbalance is inside the tolerance, normally 10,000 ounces for gold, the auction ends and that price becomes the benchmark. If not, the price moves and another round runs.

This is a wholesale price for unallocated metal in London, quoted per troy ounce, which is 31.1035 grams. Nobody in India pays it.

What sits between London and Mumbai

Three things move the domestic price away from the international one.

The rupee

Gold is priced in dollars. A weaker rupee raises the rupee price of gold even when the dollar price has not moved at all. On days when the Indian rate rises and the international headline says gold fell, the currency is usually the reason.

Import duty

India imports nearly all the gold it consumes, so duty is a direct addition to the landed cost. It currently runs at 6%: 5% basic customs duty plus 1% Agriculture Infrastructure and Development Cess.

That figure is recent. Until the Union Budget of 24 July 2024 the total was 15%: 10% basic customs duty and a 5% cess. Cutting it by nine percentage points took a visible step out of the retail price almost overnight, and it is the single largest policy move in Indian gold pricing in over a decade.

GST

3% on the value of the gold, charged at the point of sale rather than on import. It is not part of the benchmark rate you see quoted. It appears on your bill. The jewellery price calculator shows where.

The Indian benchmark

This is the step most explanations skip. India’s reference rate comes from a benchmark administrator jointly established by the bullion trade body and a refiner, and it works on a rules-based process rather than a conversion:

1. Eligible market participants submit prices during a defined window.
2. Those submissions are aggregated by a published methodology.
3. The computed price goes through independent validation and oversight.
4. The benchmark is published.

It is struck twice a day, morning and afternoon, quoted in rupees, for 995 purity gold. The AM and PM fixings are why rate sites, this one included, update twice on a trading day rather than continuously.

Alongside it, gold futures trade on MCX in rupees, which is where much of the domestic forward price discovery happens. Futures and the physical benchmark inform each other without being the same number.

Your jeweller’s board

The benchmark is wholesale, for high-fineness metal, at scale. A shop’s board rate starts there and adds the cost of actually being a shop: financing stock, local transport, insurance, margin. That is why two jewellers on the same street can display slightly different rates on the same morning.

Then the bill adds the parts that have nothing to do with the metal price: making charges, any wastage, a hallmarking fee, and GST. On a typical purchase those add 12–20% on top of the metal value, and they vary far more between shops than the rate does.

Today’s benchmark is ₹14,059.30 a gram for 22K. A 10 gram chain therefore holds about ₹1,40,593.00 of gold, and will be billed at meaningfully more than that.

Reading a day’s move

When the Indian rate moves and you want to know why, there are only a few candidates:

• The dollar price moved. The usual cause, and the one the international headlines report.
• The rupee moved. Enough on its own to push the Indian rate the opposite way from the global one.
• Duty or tax changed. Rare, but large when it happens. See July 2024.
• Domestic demand shifted. Wedding season and festivals such as Dhanteras and Akshaya Tritiya tighten local supply and widen the premium physical buyers pay.

What you will not find is a single authority setting the price by decision. Every step in the chain is either an auction, a rules-based aggregation of submissions, or a shop deciding what it needs to charge.

Where the rate on this site comes from, and what it excludes, is set out in full on our methodology page.