Gold prices in every Indian city are not uniform. Gold prices for 22 karats and 24 karats varies and one city could certainly be cheaper than the other.
Why are gold prices different in different cities of India?
India does not mine too much gold and almost all of the gold is imported into the country. This gold is imported by some large banks like State Bank of India, ICICI Bank, HDFC Bank, Yes bank, Union Bank etc. Apart from this, we have the MMTC, STC etc., allowed to import gold.
These entities import gold at international prices. So, if gold prices in the international prices trend higher, than gold prices in India also move higher.
However, in India there is not standard price for gold. Almost every city in India or state has different price for gold. There are several reasons why the price of gold is different in different cities and varies from city to city.
There are local levies and taxes that come into the picture, which leaves every city having a different price for 22 karats and 24 karats gold. Apart from this, the local bullion association also dictates the price. This leads to the price varying from city to city. The prices of gold are revised twice everyday and largely reflect the trend in the international markets.
Which city or state offers gold at the cheapest price in India?
Gold rates in Kerala at the moment are the cheapest in terms of 22 karats and 24 karats. In cities of Karnataka too gold is cheaper, as compared to Mumbai or Delhi. For example, the 22 karats gold rates in Bangalore is much cheaper than that offered in the north. Generally speaking, in some of the southern cities the price of gold is much cheaper compared to the north and the west.
Take a look at the 22 karats gold rates in some of the top cities in India
|City name||22 karats rates|
|Mumbai gold rates||Rs 49,500|
|Delhi gold rates||Rs 49,200|
|Kolkata gold rates||Rs 49,810|
|Bangalore gold rates||Rs 47,730|
|Hyderabad gold rates||Rs 48,420|
|Chennai gold rates||Rs 48,420|
|Ahmedabad gold rates||Rs 49,310|
As we can see the gold rates are the cheapest in Kerala at the moment, which obviously makes it the best city for buying gold. However, can we freely buy any quantity of gold from the city where it is the cheapest? We are not sure about the norms at the moment. One would need to talk to the gold jeweller before buying in a city.
Gold prices have rallied significantly in the last one year and investors would do well, by buying it at the cheapest possible prices.
About the author
Sunil Fernandes has spent 25 years covering business and finance in India and abroad. Sunil has worked with frontline daily newspapers including Hindustan Times, Deccan Herald and Gulf Times. He has also worked with investment magazines like Dalal Street Investment Journal and Oman Economic Review. His forte remains stocks, mutual funds and tax planning.