Gold & Silver

Gold and silver are traded around the world, and their prices are set by buyers and sellers in international markets. In India, the price you see in a shop starts from that world price and is then adjusted for local factors.

Where the price comes from

Gold and silver are priced in US dollars on international markets. To reach an Indian price, the dollar price is converted into rupees at the current exchange rate, and import duty and taxes are added. This is why the rupee–dollar exchange rate matters: when the rupee weakens, the same world price becomes more expensive in rupees.

How prices are quoted

In India, gold is commonly quoted per gram or per 10 grams, and silver per kilogram. Prices can differ a little from city to city because of local taxes and charges, so a price quoted in one place may not match another exactly.

Purity

Pure gold is described as 24 carat. Jewellery is usually made from a lower-carat gold, such as 22 carat, because pure gold is soft and other metals are mixed in to make it stronger. In India, BIS hallmarking is a scheme that certifies the purity of gold jewellery.

What you pay for jewellery

The price of a piece of jewellery is more than the price of its metal. It usually includes making charges for the craftsmanship, and tax. That is why jewellery costs more than the value of the gold in it, and why selling it back often brings in less than you paid.

Gold and silver are not the same

Gold is valued mainly as a store of value and for jewellery. Silver is also used in jewellery and held as an investment, but a significant share of its demand comes from industry, for example in electronics, so its price can respond to industrial demand as well.

Key points

• Indian prices start from the world dollar price, then add the exchange rate, duty and taxes.
• Gold is commonly quoted per gram or per 10 grams, and silver per kilogram.
• 24 carat is pure gold. Jewellery is usually a lower carat, and hallmarking certifies purity.
• Jewellery prices include making charges and tax on top of the metal.