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The Shining Truth: Gold price isn't made in India

Feb 19, 2013, 04.21AM IST

Indians buy a lot of gold, but India has little control over gold price. As this chart demonstrates, tracking global and Indian gold prices from 2005 till now, Mumbai and New York spot prices of gold move in tandem except when (a) the rupee moves sharply & (b) Govt of India changes the import duty. The three periods when a significant gap appeared between Indian and global gold prices, as the chart shows, are periods of sharp rupee movement or import duty changes.