Where the gold price comes from
There is no single shop that sets the price of gold. The 'spot price' you see on AurumValue's live gold page is the price for immediate delivery in the wholesale market, where banks, refiners, funds and central banks trade large bars, mostly in London, plus futures contracts on exchanges such as COMEX in New York and the Shanghai Gold Exchange. Trading runs almost 24 hours a day on weekdays, so the price updates many times a minute. Twice a day the LBMA Gold Price auction in London sets a benchmark that many contracts refer to.
Spot is quoted in US dollars per troy ounce. Every other price, whether in euros per gram, rupees per 10 grams or dirhams per gram of 22k, is derived from that dollar price using live exchange rates and the relevant purity.
Interest rates and real yields
Gold pays no interest. When interest rates on safe government bonds are high, especially after inflation (the so-called real yield), holding gold has a higher opportunity cost, and some investors sell. When real yields fall, gold becomes relatively more attractive. That is why announcements from the US Federal Reserve and the release of US inflation and jobs data can move gold sharply within minutes.
The US dollar
Because gold is priced in dollars, a stronger dollar makes gold more expensive for buyers who use other currencies, which tends to dampen demand and pressure the dollar price. A weaker dollar usually has the opposite effect. For you as a local buyer the effect is double: if your own currency weakens against the dollar, your local gold price rises even if the dollar price is unchanged. This is why gold in Turkish lira, Egyptian pounds or Nigerian naira has risen far more than gold in US dollars over the last decade. Compare the gold price in TRY or in INR with the USD chart to see the difference.
Inflation and currency debasement
Gold has a long record as a store of value when the purchasing power of money falls. It does not track inflation month by month, but over long periods it has tended to hold its real value. Fears of persistent inflation, large government deficits or currency debasement tend to attract buyers, while periods of stable low inflation and strong real growth often see gold drift sideways.
Central bank buying
Central banks hold gold as a reserve asset and have been net buyers in recent years, adding more than a thousand tonnes in several consecutive years according to industry data. Purchases by the central banks of countries such as China, Poland, Turkey and India support the price because they are long-term holders that rarely sell. A slowdown in that buying can remove a source of demand.
Risk, crises and safe-haven demand
In wars, financial crises, banking scares and sharp stock market falls, investors often move money into gold as a safe haven. These moves can be fast: gold can gain several percent in days. They can also reverse once the panic fades. Not every crisis lifts gold immediately, because in a sudden liquidity crunch some investors sell gold to raise cash, as happened briefly in 2008 and March 2020.
Investment flows and physical demand
Gold-backed exchange-traded funds (ETFs) let investors buy gold through a stock exchange; large inflows or outflows add to or remove from physical demand. Jewelry demand, led by India and China, is very price-sensitive: buyers wait when prices spike and buy more on dips and around festivals and wedding seasons such as Diwali, Akshaya Tritiya and Chinese New Year. Mine supply changes slowly, so it rarely drives short-term moves.
Why your local shop price differs from spot
Even when spot is flat, the price you pay at a jeweler differs because of making charges, VAT or GST, import duties and the shop's margin. In India, for example, the local rate includes import duty and 3% GST on top of the international price; in the EU, investment gold is VAT-exempt but jewelry carries full VAT. The spot price is the neutral benchmark; read how pawnshops price gold to see how buy-back offers are built on it.
How to follow the price without overreacting
Short-term moves are mostly noise for people buying jewelry or a few coins. Look at longer charts: the gold price history by year shows that gold has had multi-year rallies and long flat or falling stretches. If you buy regularly, averaging your purchases over time reduces the risk of buying at a peak. If you are selling, the percentage you are paid by a buyer usually matters more than a 1% daily move. And if you are comparing gold with silver, our gold vs silver guide and the live gold/silver ratio are useful context.