How are city-level gold price by merchants determined?

Gold Price - trader vs. investor/consumer

I am not an investor, but just doing this research for a project here -

Does the price of gold differ depending on whether it is traded as a commodity at MCX/NCDEX or is purchased as a regular consumer from banks or from jewellers?

Also, how frequently does the price change? As a commodity, I believe the price changes by the minute (spot price). But, how does the price work for the consumer segment? I checked this site of a popular south Indian jeweller (princejewellery.com ) and there, the price of gold is given "for the day". I am little confused about what I should be quoting if I were asked for the price of gold. Is it the commodity spot price or the daily rate quoted by such jewellers?

Thanks a lot.

Re: Gold Price - trader vs. investor/consumer

Any idea, people? Your help is much appreciated.

Thanks,

Re: Gold Price - trader vs. investor/consumer

very interesting insight/question anond.

i read an article somewhere, that if gold was not traded on futures, its price would be 90% less . it essentially means that the price we see in the metal is actually a result of speculation. A lot of People benifit if the price was of gold goes up.

it is not possible for jewelers to change the rate of the metal every minute. i have seen the price of gold shoot up 100 rs in flash two seconds. so they take the value of the closing price of the previous day. and you simply cannot quote the prices given in MCX as they are future prices, the spot prices are given in nationalspotexchange.com.

I tried asking this question at another sub-forum with little success; so here it goes.

From what I understand, the end-of-day spot price of gold is often used as the metric to determine what price to buy gold at from the jeweller the next day. in that case, why does the price of gold (as announced on news channels as well as by jewellers) differ at a city level while there is only one national spot exchange?

I had no idea that rates differ at a city level, whereas all jewelers across the nation should have only one reference point i.e the national spot exchange. maybe there is so much (mis)information available, maybe someone sees the current price on a local business channel and considers that the current price of gold and calculates. some jewelers misquote to get a higher price. some take the international rate and convert it to Rupee rates. May be some people are naive and take the mcx future rates.

i cant think of any other reason. if you find out do let us know.

thanks.