The jewelry stores in India do their best business during the festive seasons. These are the occasions when the women want to look their best, want to flaunt themselves wearing glittery diamonds and gold jewelry. Gold jewelry, in particular, is one of the most popular choices among men and women alike for festival shopping. The festival repertoire of Indians is incomplete without an article made of gold in it. Gold, in general, has been a very important part of Indian culture since time immemorial.
Now, we are all humans, and love a great deal, especially when it comes to something valuable. Everyone wants better, heavier gold for a lesser price. But everyone gets confused as to where to buy the gold from. Prices of gold don’t just differ from country to country, but also from city to city within the country. This is one reason why sometimes people tell others to buy jewelry on their behalf because it’s cheaper there. But what causes the difference in prices? Why do the same gold bangles in 10 grams and gold bangles designs in 20 grams cost more in one city within India and less in another?
Gold is a global commodity, which is why it’s prices in countries are determined by an international standard. This international standard gives you gold rates of different countries based on various factors. It means that within India, the price of gold should be the same everywhere. However, this is definitely not the case. What causes the difference then?
The price of gold within the country doesn’t just depend on the international gold rates of the day. A number of factors determine the price of gold from city to city. Here are a few-
- Transportation Cost- Yes, hauling charges add up to the gold prices in different cities. So let’s say that Kanpur has a warehouse that imports gold from a country. Two stores of the same chain, one in Lucknow and one in Hyderabad are supplied gold from this warehouse. Obviously, the transportation cost from Kanpur to Hyderabad will be more than from Kanpur to Lucknow, hence price of the same gold bangle of 10 gms will be different in the Hyderabad store than the Lucknow store.
- State Government Policies- Every state government has different policies regarding the import of things like gold. These policies involve taxations, rules, and regulations regarding transport, sale, etc. All of these affect the price of gold in cities situated in different states, even if the jewelry store belongs to the same chain.
- Gold Bullion Associations- The price of gold in metropolitan cities are decided by local gold associations called “Bullion associations”. These associations decide on a local price of gold in the city, hence causes variation.
- Cost Price of Gold- The cost at which jewelers bought the gold might be higher when they bought it. Hence they may sell it at a slightly higher price to make a profit. His own profit also makes a difference in the price of gold, and this factor doesn’t just cause variations from city to city but also from store to store.
However, these variations shouldn’t be a reason for you to book a ticket to a city 1000 km away just for cheaper gold. The prices aren’t too different from the international gold rate for India. It’s only a difference of 200-300 rupees, so you can rest easy. Happy jewelry shopping!