Things to keep in Mind while Buying Gold

Purchasing gold has always been an intense thing to do. We are never sure if we are following the precise procedure to buy it. Although there is no pattern to purchase gold there are certain guidelines that one can follow. Gold is purchased not only in the form of jewelry but also in form of coins or solid gold.

While purchasing the gold in the form as per requirement one must keep few things in mind so that you are not cheated in terms of rate or maybe purity.

In the following we will be inculcating things you can acknowledge while buying gold:

• Purity: To measure the purity of gold there are 2 ways i.e. Karat and fineness. Karat is most commonly used to measure the purity of gold. In Karat (KT), 24KT is the purest gold which contains 24/24 parts of gold. In case of 22KT gold, it contains 22 parts of gold and 2 parts of other metals such as zinc or silver to increase the durability of the gold. Fineness is mainly used to measure the purity of 24KT gold. It is expressed in units of parts per 1,000. 24KT gold, if measured in fineness, will show 999.9 parts per thousand of purity.

• Hallmark: To ensure that consumers are not cheated in terms of rate and purity, the Government of India has set up a Bureau of Indian Standards (BIS). To certify the level of purity, BIS certifies the gold by marking its signature. To check the hallmark on gold there are 5 components. These components involve BIS logo, purity/fineness corresponding number (for 22KT, 916 is used), the logo of Assaying and Hallmarking center, year of marking, and jewelers identification mark. Effective January 1, 2017, BIS announced that it will be hallmarking gold jewelry only for 22KT, 18KT and 14KT. BIS does not hallmark 24KT as it is against their norm.

• Packaging: In terms of gold coins, gold coins are packed in tamper proof packaging. This packaging ensures solidity of gold coin.

• Making Charges: Making charges vary for gold coin and jewelry. The charges for making ranges from 4% to 11% and for jewelry it starts from 8-10% which may depend on the craftsmanship.

• Options for Buying: One can buy gold from jewelers, banks, the stock holding Corporation on India, MMTC (a government-authorized public sector for the purchase of gold and silver), and non-banking financial companies.

• Re-selling of Gold: If you plan to re-sell your gold coins, you should keep in mind that as per Reserve Bank of India (RBI) banks will not buy back the gold coins you have purchased from them.

 

Note – Please note that the above article is for education purpose only. This is based on our interpretation of laws which may differ person to person. Readers are expected to verify the facts and laws.

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