Indian Gold Book:Indian Gold Book - Gold Bars Worldwide

MUMBAI GOLD PRICES
Indian gold prices are normally expressed in rupees per 10 g at 995 purity, or per 10 tola at 999 purity.
Over the past 10 years, the difference between the Mumbai and London gold price has steadily narrowed.
In 1990, the Mumbai premium averaged 56%. In 2001, it averaged 9%.
MUMBAI
The prevailing price of standard gold in Mumbai is widely accepted as a national benchmark.
The Mumbai price reflects the international US dollar price, the rupee exchange rate with the US dollar (the official, as well
as the unofficial cash and hawala rates), and the level of local gold supply and demand. It also takes into account bar import
costs (including Customs duty), and applicable State sales and other taxes in Mumbai.
The standard gold price in other cities and towns can be slightly higher or lower than the Mumbai price, dependent on local
rupee exchange rates, State and municipal taxes, bar transportation costs, and their own level of local gold supply and
demand.
The relevant standard gold price then determines the local price of 10 tola bars, and the local price per gramme at which
jewellery retailers sell, exchange and buy back gold jewellery at 22 carat and other caratages.
Bank prices for 10 tola bars at 999 purity are now also widely publicised.
This has occurred since November 1997, when authorised banks started importing gold bars. As banks rely on imported
gold bars, and do not buy bars on the secondary market, their prices can sometimes be above the standard gold price.
SOURCES
There are no accessible statistics that record Mumbai’s highest, lowest and average monthly and annual gold prices, and
Mumbai’s variation from London gold prices, back to 1970. In addition, many published statistics, relating to the 1970s and
1980s, appear to use prices on the last trading day of March, or India’s April - March financial year average, as indicative
calendar year averages.
When referring to the tables in this section, the following can be noted:
Period 1970 - 1989
Rupee gold prices. The price in Mumbai on the last trading day of March, as recorded by The Bombay Bullion Association
Ltd.
US dollar gold prices. The average for March at the London gold fix, as recorded by Samuel Montagu & Co Ltd in its
historical bulletins.
Rupee/US dollar exchange rates. The annual period rate, as recorded by the IMF in its International Financial Statistics
Yearbook.
Difference between Mumbai and London prices. It is only indicative as the average US dollar price for March is compared
to the rupee price on the last trading day of March.
Period 1990 - 2001
Based on statistics compiled by Madhusudan Daga, who provides many of the statistics normally published by The Bombay
Bullion Association Ltd.
Rupee gold prices. Average monthly and annual prices in Mumbai.
US dollar gold prices. Average monthly and annual prices at the London fixes. The annual average is the average of the
monthly averages.
Rupee/US dollar exchange rate. Official average monthly and annual rates, based on daily rates recorded in Mumbai.
Both periods
Equivalent London gold price in rupees per 10 g. Based on the official exchange rate, 10 g equals 0.32151 oz, and purity
at 995.
AN INTRODUCTION TO THE INDIAN GOLD MARKET 147