Gold trading basics
How Indian gold prices are built from international spot, the rupee and import duty, how MCX gold works, and what moves gold.
1. Ways to own gold in India
- Physical gold: jewellery, coins and bars. Carries making charges, storage and purity questions.
- Gold ETFs and gold mutual funds: units backed by gold, traded or bought like any other fund.
- Sovereign Gold Bonds: government bonds linked to the gold price, with interest. New issues depend on the government.
- MCX gold futures and options: leveraged contracts for traders.
2. How the Indian gold price is built
Gold is priced globally in US dollars per troy ounce. To get an Indian price:
- Convert to rupees using the USD/INR rate.
- Convert ounces to grams: one troy ounce is 31.1035 grams, and Indian quotes are usually per 10 grams.
- Add import duty (set in the Union Budget), which gives the landed cost.
Landed cost per 10 g = spot ($/oz) × USD/INR ÷ 31.1035 × 10 × (1 + duty)
So Indian gold can rise even when international gold is flat, simply because the rupee weakens. Retail prices then add GST and making charges.
3. MCX gold contracts
The Multi Commodity Exchange (MCX) lists gold futures in several sizes, from the 1 kg contract down to smaller mini contracts. Prices are quoted per 10 grams.
MCX trades from 09:00 to late evening IST (usually 23:30, or 23:55 when US daylight saving is off), so it reacts to US data and Fed announcements during Indian evenings.
The gap between MCX price and landed cost is the premium or discount. It reflects local demand (weddings, festivals), duty expectations and delivery costs.
Contract sizes, margins and trading hours change; check MCX's current contract specifications before trading.
4. What moves gold
- US real interest rates: gold pays no interest, so it tends to rise when real yields fall.
- US dollar: a weaker dollar usually lifts dollar gold prices.
- Fear and uncertainty: wars, crises and market crashes drive demand for safety.
- Central bank buying: a major source of demand in recent years.
- Rupee: a weaker rupee lifts Indian gold prices directly.
- Indian duty changes and seasonal demand.
Key takeaways
- Indian gold = dollar spot × USD/INR, converted to 10 g, plus import duty.
- A weaker rupee raises Indian gold prices even if global gold is flat.
- MCX trades into the night and reacts to US data; check contract specs and margins.
- Real interest rates, the dollar and fear are the big drivers.
Try it on ExpertView: See MCX gold, spot, USD/INR and landed cost on the dashboard →
From ExpertView's free courses at expertview.in/learn. For study and educational use. Not investment advice. Rules, lot sizes, taxes and timings change; check the latest from NSE, MCX, SEBI and the Income Tax Department.