Can gold prices vary between two places or countries at the same point in time ?
Here is an answer but I am looking for a more detailed answer.
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3 Answers
Most of the gold prices at international markets are USD denominated. Hence the prices would be same in international markets where large players are buying and selling.
However this does not mean that the prices to the individuals in local markets is same. The difference is due to multiple things like cost of physical delivery, warehousing, local taxation, conversion of Local currency to USD etc.
So in essence the price of Gold is similar to price of Crude Oil. The price of Oil is more or less same on all the markets exchanges, though there is small difference this is because of the cost of delivery/shipment which is borne by the buyer.
However the cost of Oil to retail individual varies from country to country.
The market prices for futures and depository ETFs like GLD and IAU are pretty consistent.
Prices for physical gold at retail can vary dramatically. At a coin store that I was at a few weeks ago, there was a very wide buy/sell spread on commonly available gold coins.
I don't know about an actual example now, but in the past, India had restrictions on how much gold you could bring into the country from abroad, and there were heavy customs duties. Thus, gold smuggling was a huge business, because by avoiding the duties, people could stand to make a lot of money. At some point in 90s, India made changes in these laws so that smuggling was not as profitable.
