InvestorQ : How is the price of silver in India calculated?
Suhani Mirza made post

How is the price of silver in India calculated?

Answer
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3 years ago
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The local price of silver is largely based on the global silver price. While globally the price of silver is expressed in terms of $/oz, in India the price of silver is normally expressed in terms of INR/kilogram. In the chart above, the recent price of silver is $16.27/troy ounce. Here is how we arrive at the corresponding Indian price for silver…

First we convert the troy ounce into grams. One troy ounce = 31.1035 grams.

Hence the price of 1 gram of silver will be (16.27/31.1035) = $0.5231 per gram

We can apply the average $ exchange rate of 66/$ to arrive at the rupee price of INR 34.53 per gram

Since the price of silver in India is measured in 1 kilogram (1000 gram) basis, the landed rupee price will be Rs.34,530/- per KG.

Of course, to this you will add the import duties, cess and other stamp duties and if you also add the cost of carry, you will get the MCX silver futures price of around Rs.37,700/kg. The crux of the matter is that the domestic price of silver is largely influenced by the global price of silver on the LME.

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