How Gold Price Is Calculated

Why local prices differ from the spot conversion

If you convert the spot price into rupees or dirhams and compare it with the shop price, the shop price is almost always higher. The gap has four ingredients. First, the exchange rate: the conversion uses the interbank rate, but bullion dealers buy dollars at the open-market rate, which can differ. Second, import duty: many countries tax gold at the border, and India is the biggest example. Third, sales tax or VAT — 3% GST in India, 5% VAT in the UAE, 20% VAT on jewellery (though not on investment gold) in the UK. Fourth, the local premium and making charges: the dealer’s margin, the refinery’s cut, and the craftsmanship on a finished piece. Add them up and the shelf price can sit anywhere from under 1% above spot (a large bar in Singapore) to 20% or more (a small piece of intricate jewellery in a high-tax market).

That is also why this site does not publish one converted number per country and call it done. Pakistan is quoted per tola from the sarafa market’s convention, India from the IBJA benchmark per 10 grams, Thailand for 96.5% gold by the baht weight — each market in its own terms, with the method shown. The numbers above are today’s sheet values; the live spot behind them is on the gold spot price page, and every country’s full table is in gold price by country.