Credibility in Gold Price Determination Must Be Preserved: MP Ahammad

Malabar Group Chairman M.P. Ahammad has cautioned that certain emerging practices in gold price determination in India deviate from established norms and risk undermining the long-standing credibility of the country’s gold trade.

He said gold prices are determined by three key factors: international gold prices, the exchange rate of the Indian rupee against the US dollar, and import duty. While customs duty remains fixed for a defined period, fluctuations in global prices and currency movements make daily price revisions necessary.

Traditionally, gold prices are set in a transparent and reliable manner by trade associations and published before 9:30 am. Prices fixed for the day are revised only in cases of exceptional market volatility.

However, M.P. Ahammad noted that in certain instances, a section of traders has been increasing prices arbitrarily, contrary to the established mechanism, without offering clear justification to consumers. Such practices, he warned, could erode trust in the sector and create concern among consumers, investors, and industry stakeholders. He urged all concerned to refrain from actions that compromise the integrity of the trade.

He added that consumer interest remains the foremost priority for Malabar Gold & Diamonds and that all business practices must be guided by transparency and fairness. He also highlighted the company’s ‘One India One Gold Rate’ initiative, introduced to eliminate price disparities across states, noting that since tax rates are uniform nationwide, gold whose price is linked to international benchmarks should be sold at a uniform price across the country.