Page 19 - Bullion World Issue 12 Volume 05 December_2025

Bullion World | Volume 5 | Issue 12 | December 2025

In the Union budget of Feb 2018, the then Finance Gold price is the lowest in Cochin, probably due to
minister Shri Arun Jaitely announced the launch of the abundant supply of old gold from various sources,
gold spot exchanges at multiple locations and SEBI including auction of defaulted gold loans. Whereas
at Coimbatore, (a jewellery manufacturing centre) in
granted permission to the commodity exchanges the nearby state of Tamilnadu, there is more demand
to open spot exchanges at 11 locations, but except for gold, whereas supply is limited, leading to higher
for Mumbai and Ahmedabad, the remaining 9 prices. Consequently everyday Gold from kerala
locations are now kept under suspension, for want is smuggled to Coimbatore avoiding official logistic
channels, to fetch better prices and the money too is
of business volumes. Also it is understood that there smuggled back to kerala.
are operational hiccups for rolling out these spot
exchanges, with no refund mechanism of GST for the
EGRs traded at the gold spot exchanges at various
locations. In the 2022 union budget, Hon Finance
minister Smt Nirmala Sitharaman announced GST
refund facility for EGRs traded at the spot exchanges.
However it appears that the GST council is yet to
work out the modalities of GST refund for EGRs sold.
The proposed gold spot exchanges are still continuing
in limbo, for want of a GST refund mechanism for
the seller, whenever his physical gold is sold to the
exchange, which in turn is sold in EGR format to
another buyer, who shall be paying only the GST
excluded price of gold to the exchange.

Gold price disparities across india: The absence of
a single transparent pricing mechanism and seamless
transfer of gold across multiple locations has resulted
in huge price disparities across India, depending on Benefits of transparent gold price across India, as
logistics issues or excess supply in one locality or and when reflected in gold spot exchanges:
supply constraint in another locality, as seen below:

a. Bullion traders earn better profit margins while
sourcing from low cost supply centres. Eg the
Illustrative /indicative gold prices based on bullion dealer in Hyderabad can take delivery of
locations of india, as on 13.10.25 low cost bullion from the Hyderabad exchange
Location Price per gm- Rs vault, as and when it is purchased from the lowest
1 Chandigarh 12400 cost source in Cochin. Normally the profit margin
2 Ahmedabad 12930 in bullion is 0.1% ie, around Rs 10 per gm of
gold. Whereas presently there are interstate price
3 Jaipur 13100 differences of Rs 100 per gm, as seen in the above
4 New delhi 1300 chart. As of now the bullion dealers are deprived

5 Kolkata 12800 of sourcing gold from low cost supply bases, due
6 Mumbai 12850 to logistics issues and delivery delays, but in a
7 Kolhapur 12400 gold spot exchange, the delivery is OTC - over the
8 Hyderabad 13050 counter from the vault.
9 Chennai 13000 b. As and when there is transparent pricing available
10 Coimbatore 13000 for selling their old gold, customers shall be
11 Cochin 12900 coming forward to monetize their old gold,
12 Bangalore 13000 bringing more of idle gold into recirculation. They
get better price realisations, when their old gold is
sold to BIS licensed gold refineries, who sell their
refined gold bullion - good delivery bars to the spot
exchanges at better spot prices .

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