Gold Rate Today in Machilipatnam

Situated in the Krishna district of the Indian state Andhra Pradesh, Machilipatnam is an ancient port town. It served as a trading port for Europeans and Qutb Shahi Kings on the Bay of Bengal in the 16th and 17th centuries. Currently, its importance as a seaport and a railroad terminus remains intact. It boasts industries such as carpet weaving, scientific instrument manufacturing, and oilseed & rice milling.

With ample industrial opportunities and transportation, people are willing to invest their disposable income into gold. The fluctuations in the gold rate in Machilipatnam over the past few months show that gold is considered one of the major investment options in the city. Moreover, it is a crucial commodity during auspicious occasions such as weddings and festivals.

Impact of GST on gold prices in Machilipatnam

The implementation of the Goods and Services Tax (GST) in India made a major impact on the gold rate across India. The gold prices in Machilipatnam also changed considerably with the inclusion of GST. Let us have a look at how GST impacted the gold rates.  

The following taxes were levied on the refined gold before GST:  

• Import duty - 10%
• Value-added tax (VAT) - 1.2%
• Customs duty - 1%

The total taxes charged on the total cost (in percentage) = 12.2%

For instance,

If, the cost of refined gold = Rs. 1,00,000

Total cost paid by buyers to purchase the gold = Rs. 1,12,200.

After the implementation of GST in India and the latest notification by the Finance Ministry of India, the below taxes were charged:

• Basic customs duty (BSD) - 12.5%
• Agriculture Infrastructure and Development Cess (AIDC) - 2.5%

Taxes to be paid till now (in percentage) = 15%

For instance,

Cost of refined gold = Rs. 1,00,000,

After the above taxes, the cost paid by buyers = Rs. 1,15,000.

In addition, according to the World Gold Council, buyers need to pay 3% GST on this cost.

1,15,000 * 3/100 = 1,18,450

Total cost paid by buyers to purchase the gold = Rs. 1,18,450.

Total taxes paid post-GST (in percentage) = 18.45%

This implies that the introduction of GST and the latest changes in the tax structure increased the gold rates in Machilipatnam.

Understanding 916 hallmarked gold prices in Machilipatnam

The Bureau of Indian Standards (BIS) is an authority that hallmarks gold jewellery in India. The BIS 916 hallmark is a sign that the gold is of high quality and genuine. Moreover, you can easily exchange or sell hallmarked jewellery in the future.

A 916-hallmarked gold is 22-karat gold. It contains a purity of 91.7%, according to the World Gold Council. The gold rate for a 916-hallmarked gold is the same as that of the gold rate of 22-karat gold.

Factors that Influence Gold Rates in Machilipatnam

The major factor that influenced the gold rates in Machilipatnam includes the Rupee-Dollar conversion rate. The variations in the conversion rate greatly impacted the price in the city. In addition, inflation, prices of other metals, and local conditions also influenced the prices. Let us have a look at each of these factors below:

The conversion rate between Rupee and the U.S. Dollar

Gold is traded in the U.S. Dollar in international markets. In case gold is imported from other countries, the conversion rate between the U.S. Dollar and the Indian Rupee is an important factor in impacting the gold prices in Machilipatnam. So, if the price of the Indian rupee drops against the U.S. dollar, the gold prices in Machilipatnam are bound to rise. Over the past few months, there are huge variations in the conversion rate between Rupee and Dollar. This is why the conversion rate hugely impacts the prices of gold in the city.

Inflation

Inflation reduces the value of the currency. This, in turn, increases gold prices.

Local market conditions

One of the major factors that impact the gold rate in Machilipatnam is the conditions in the local market. Making charges of different jewellers, state taxes, and import duties are major local market conditions that impact the overall gold price. Moreover, transportation costs impact the gold rates when gold is transported from other parts of the country. The increase in prices of petrol or diesel in the country surges the transportation costs. These factors, in turn, raise gold prices slightly.

Prices of metals used for alloying

Different metals such as copper, silver, and others are used for alloying with gold to produce 22-karat and 18-karat jewellery. The fluctuations in the prices of these metals impact the gold rates in Machilipatnam.