I recently went to silver jewellery shop and the reputed owner told the following thing. I cant find any flaw in his logic and since he is in the business, I have to say, unfortunately right. Have you gone to a big jewellery shop and asked the gold rates for the jewellery? The 5 shops which are next to each other will quote different gold prices as each one will be offering a different amount of discount on gold. Not discount on the making charge but on the gold rates.
Now lets see the logic. Gold prices are standard all over the world on any particular time or day. If not there will be people buying it where it is cheaper and selling it where it is high, thus bringing the rates equal. Mind you, gold is a very liquid commodity and sold and bought massively from a gram to kgs around the world from time immemorial.
So the rate at which a jeweller can buy gold is the same as any other jeweller as the 24 carat gold rate is constant at a period of time. So how is it that the jewellers are able to give you a discount on those rates?
The answer is that they aren't giving you the amount of gold they are promising they are giving you. They may say they are giving 2 grams of 24 carat gold, but in truth there is no 2gm of pure gold, but 1.98 grams of gold and 2 grams of copper which basically means you are buying a lesser than 24 carat gold.