COMEX vs MCX Gold Price: Why They Differ & How to Convert
The import parity formula, duty structure, and the role of USD/INR — explained for Indian commodity traders.
New to COMEX? COMEX (Commodity Exchange, New York) is the world exchange where gold's global price is set in US dollars — MCX in India derives its price from it. Read: What is COMEX? →
The Import Parity Formula — Step by Step
MCX gold is not independently priced. It is derived from the international COMEX price through a precise chain of conversions. Understanding this chain is the most important insight for any Indian gold trader.
| Step | Calculation | Example (COMEX $3,300/oz, USD/INR 84.5) |
|---|---|---|
| 1. COMEX to $/10g | COMEX ($/oz) ÷ 31.1035 × 10 | $3,300 ÷ 31.1035 × 10 = $1,061.0/10g |
| 2. Convert to INR | $/10g × USD/INR rate | $1,061 × 84.5 = ₹89,655/10g |
| 3. Add BCD (6%) | × 1.06 | ₹89,655 × 1.06 = ₹95,034 |
| 4. Add AIDC (3%) | × 1.03 (on BCD-inclusive value) | ₹95,034 × 1.03 = ₹97,885 |
| 5. Add GST (3%) | × 1.03 | ₹97,885 × 1.03 = ₹1,00,822 |
| 6. Add market premium | + ₹200–600/10g (seasonal) | ₹1,00,822 + ₹400 = ₹1,01,222 MCX fair value |
The Three Components of the MCX–COMEX Spread
1. Currency: USD/INR Is the Largest Driver
Every ₹1 move in USD/INR shifts MCX gold by approximately ₹1,000–1,300 per 10 grams. This means a weakening rupee independently pushes MCX gold higher, even if COMEX is flat or falling. This is why on days when the rupee depreciates sharply (risk-off, global dollar strength), MCX gold can rise while COMEX gold falls — they are momentarily moving in opposite directions.
For traders: if COMEX gold is falling but USD/INR is rising, your MCX gold position may still be profitable. Always track USD/INR alongside COMEX when trading MCX gold.
2. Import Duties: The Structural Premium
India imposes layered duties on gold imports that create a structural premium in MCX prices vs the raw COMEX-to-INR conversion:
- Basic Customs Duty (BCD): 6% — reduced from 15% in Union Budget 2024 (July 2024)
- Agriculture Infrastructure Development Cess (AIDC): 3% — on the BCD-inclusive value
- GST: 3% — on the total landed cost
- Total duty effect: ~12–13% above the raw import value
3. Physical Market Premium: Seasonal and Demand-Driven
Beyond the formula, MCX gold carries a domestic physical market premium that reflects actual supply-demand in India. This premium typically ranges from ₹200 to ₹600/10g but spikes to ₹800–1,500/10g during peak demand periods:
- Dhanteras (Oct–Nov): Premium spikes ₹800–1,200 as jewellers scramble for physical stock
- Akha Teej (Apr–May): Second-largest demand spike, ₹500–800 premium
- Wedding season (Nov–Dec, Feb–Apr): Sustained elevated premium
- July–September (monsoon/off-season): Premium can fall to ₹100–200/10g
When MCX Diverges from Parity
MCX gold normally trades within ₹200–400 of the calculated import parity. Large divergences — MCX trading ₹800+ above or below parity — signal something unusual:
| Divergence | What It Signals |
|---|---|
| MCX 800–1500 above parity | Strong domestic demand (festival, RBI buying), limited import supply |
| MCX 400–800 below parity | Excess domestic supply, weak demand, or recent duty reduction not fully priced |
| MCX and COMEX moving in opposite directions | USD/INR move is dominating; not a true COMEX divergence |
| Spread suddenly widens overnight | Duty change announced, import quota change, or RBI gold buying/selling |
Frequently Asked Questions
Why is MCX gold price higher than COMEX gold price?
MCX gold is priced in Indian rupees per 10 grams, while COMEX gold is priced in US dollars per troy ounce. The MCX price is higher for three reasons: (1) Currency conversion — multiplying the dollar price by USD/INR (~84–95) gives the rupee value; (2) Import duties — India charges 6% Basic Customs Duty + 3% AIDC + 3% GST, adding roughly 12–13% to the landed cost; (3) Physical market premium — domestic demand (weddings, festivals, RBI buying) adds ₹200–600/10g above import parity. The sum of these factors means MCX gold typically trades at a 12–16% premium to the raw COMEX price converted to INR.
What is the MCX gold import parity formula?
MCX Gold Import Parity = [COMEX ($/oz) ÷ 31.1035 × 10 × USD/INR] × (1 + 0.06 BCD + 0.03 AIDC) × (1 + 0.03 GST) + ₹200–600 premium. Example at COMEX $3,300/oz and USD/INR 84.5: Step 1: $3,300 ÷ 31.1035 × 10 = $1,061/10g. Step 2: $1,061 × 84.5 = ₹89,664. Step 3: × 1.09 (BCD+AIDC) = ₹97,734. Step 4: × 1.03 (GST) = ₹100,666. Step 5: + ₹400 premium = ₹1,01,066/10g MCX fair value.
Why does MCX gold sometimes diverge from COMEX even after adjusting for duties and exchange rate?
MCX gold can trade above or below import parity for several reasons: (1) Festival/wedding season demand pushes the physical premium up to ₹800–1,200/10g above parity; (2) Import restrictions or duty changes cause temporary dislocations; (3) Gold ETF demand (domestic) adds buying pressure independent of international prices; (4) Rupee volatility — a rapid USD/INR move is priced into MCX before it fully shows in COMEX; (5) Global arbitrage tightens the spread again over days or weeks. A sustained MCX premium above ₹600/10g over import parity often signals strong domestic demand.
How does a change in USD/INR affect MCX gold price?
Every ₹1 move in USD/INR changes MCX gold by approximately ₹1,000–1,300 per 10 grams (depending on the COMEX level). At COMEX $3,300/oz: a rupee depreciating from 84 to 85 (₹1 weaker) would push MCX gold up by about ₹1,060/10g — purely from the currency effect, even if COMEX stays flat. This is why Indian gold traders watch USD/INR as closely as they watch COMEX. When COMEX falls but INR weakens simultaneously, MCX gold can stay flat or even rise.
What happened to MCX gold when India cut import duty in 2024?
In the Union Budget 2024 (July 2024), India cut the Basic Customs Duty (BCD) on gold from 15% to 6%. This was the single largest duty cut in decades. MCX gold fell ₹5,000–6,000/10g on the budget day as import parity repriced lower. The duty cut also narrowed the MCX-COMEX spread significantly — the old 15% BCD had kept MCX at a much larger premium to COMEX. This event illustrates how domestic policy (not just COMEX or INR) can independently move MCX gold prices.
Disclaimer: Import parity calculations use approximate duty rates and representative market premiums. Actual MCX prices depend on real-time COMEX, USD/INR, and domestic market conditions. Duty rates are subject to change by government policy. This is not investment advice.