Gold Prices Dip Slightly Across Indian Cities
Gold prices in India moved lower on Thursday, tracking a weak trend in international markets. This decline offers a slight reprieve for buyers after a period of sustained high prices, though the precious metal remains near elevated levels. The shift highlights how local gold rates are closely tied to global trends, currency exchange rates, and local taxes.
Market Drivers Behind the Decline
The primary reason for the drop was softer global cues. In the United States, gold futures on the COMEX exchange also traded lower. Global gold prices often react to the value of the US dollar and expectations around interest rates set by central banks like the US Federal Reserve. When the dollar strengthens, gold priced in dollars becomes more expensive for holders of other currencies, which can dampen demand and pull prices down.
In India, the benchmark for pricing is often the February gold futures contract on the Multi Commodity Exchange (MCX). This contract fell by Rs 580 to settle at Rs 1,34,314 per 10 grams. This futures price sets the tone for physical gold rates across the country, though the final price consumers pay varies significantly from city to city.
City-Wise Gold Rates for Buyers
The price of physical gold in India is not uniform. It differs based on local factors such as state taxes (GST and additional levies), transportation costs, and dealer making charges. On Thursday, following the futures market dip, rates for 24-carat and 22-carat gold saw adjustments in major hubs.
In the national capital, Delhi, 24-carat gold was priced at approximately Rs 1,35,500 per 10 grams. The 22-carat variant was available near Rs 1,24,100. Mumbai, another major trading center, saw 24-carat gold at about Rs 1,35,000 per 10 grams, with 22-carat gold near Rs 1,23,750.
In Chennai, prices were slightly higher at around Rs 1,36,000 for 24-carat gold and Rs 1,24,700 for 22-carat gold per 10 grams. Other cities like Kolkata, Bengaluru, and Hyderabad also reported similar minor declines, with prices aligning closely to the MCX trend but reflecting their specific local duties and costs.
Understanding the Carat Difference
For investors and jewelry buyers, the distinction between 24K and 22K gold is crucial. 24-carat gold is considered pure, at 99.9% gold content. It is primarily used for investment in the form of bars and coins. 22-carat gold is an alloy, containing 91.6% gold mixed with metals like copper or silver for durability. It is the standard for most jewelry in India. This difference in purity is why 22-carat gold is always priced lower per gram than 24-carat gold.
Context for Investors and Buyers
Short-term fluctuations are common in the gold market. While today’s dip is notable, analysts suggest watching the broader trend. Gold has been a favored safe-haven asset during economic uncertainty and high inflation. For Indian households, it also holds deep cultural significance, especially with the wedding season approaching, which typically supports demand.
Prospective buyers should note that the prices quoted are for gold content alone. When purchasing jewelry, making charges and other fees are added, increasing the final cost significantly. For pure investment, coins and bars from reputable banks or dealers involve lower premiums over the pure metal price.
