Today is Dussehra. And like millions of Indians you too may be planning to buy some amount of gold today, since Dussehra is considered to be an auspicious day to buy gold. But, before you go to your local gold shop, are you sure you would be buying gold and not a yellow-coloured metal?
The Bureau of Indian Standards under the Consumer Affairs Ministry has until March issued just 9,156 hallmark licences. Compared with the number of jewellers across the country, this is minuscule and you are in serious danger of buying sub-standard gold.
In fact, a survey by the Bureau of Indian Standards (BIS) under the Consumer Affairs Ministry held across 16 cities found that 90.10 percent of 162 gold samples failed purity tests. More shocking fact is that the highest purity shortage was 44.6%. Even if we agree the survey is dated, another prior survey had also shown a similar trend. If these figures still hold, there is a good possibility that you might be buying sub-standard gold, without realising.
Here are a few tips that may help you buy real gold.
When you buy diamonds, experts say you need to keep in mind, four Cs – cut, colour, clarity and carat weight. Similarly, when buying gold, keep in mind 2 Ps – purity and price.
Purity: There are a few things you can do to ensure you don’t get cheated.
The purity of gold is measured in carats, a.k.a K. The purest form of gold is 24 K. But this is not strong enough to be made into jewellery. Hence, some quantity of other metals (silver, copper and the likes) or alloys are blended with gold to make it stronger. More the mix of other metals, lower the purity of gold. So, 24K is purer than 22k or 18K.
When you buy gold jewellery from your local jeweller, you have no option but to trust him as far as the purity of gold goes. When you buy branded jeweller, you get a certificate of authenticity, stating the purity of gold on it. But the catch is that branded jewellery could be a bit more expensive than your local jewellers. But you will get whatever is promised.
Another way to ensure the purity of gold is by buying hallmarked jewellery from branded gold sellers or reputable jewellers. The standards for gold prescribed by the BIS are on a par with international standard for purity and testing. BIS certifies hallmark gold jewellery and if your gold comes with their certificate, it ensures purity. Of course, you will have to pay a bit extra, but it’s worth the cost.
How to check purity: We don’t need to turn your kitchen into a lab, to test the purity of your gold. Most branded shops and reputed jewellers have machines to check the purity called carat meters.
If you are buying gold coins or bars, banks are a good bet. They too come with Assay Certification’ for the highest quality of gold at 99.99% purity as per international standards.
In short, as far as possible stick to reputable jewellers, or if you don’t mind paying a little extra, go for branded jewellery or buy hallmarked ornaments. And, banks are a good place to shop for coins and bars.
Price: Price is an important criterion when it comes to buying gold. When you buy gold coins or bars from banks, you don’t need to pay making charges. Also the price vary from bank to bank. Mostly, the price is slightly higher than the market price. But banks do offer seasonal discounts and online offers, which could actually be a good deal if you are lucky.
At your local jeweller’s, 8-25% of the cost of gold you buy will be jewellery making charges. If you go for subtle and elegant designs, the making charges could be higher. Branded jeweller usually comes with an MRP, while local jewellers’ gold prices are market-linked. Also, keep in mind that when you buy 22K gold and pay 22k price, you actually get 22k and not 18K.
How to sell
Most Indians are emotionally attached to the jewellery they bought with their hard earned money, and hence reluctant to sell them unless the situation is dire. Another reason for selling jewellery is likely to be a dislike for its design and want a design which is in vogue. While banks sell coins and bars, they don’t buy the same back from you. So, you will have to sell them to a jeweller. When you sell ornaments, the local jeweller won’t buy it at current gold price. Most of the jewellers deduct 8-15% from the value of gold. If you fail to provide the receipt, you will get a lower price. If you sell it to a jeweller from whom you don’t buy the gold from, in all likelihood may have to sell it at a discount. All said and done, when it comes to physical gold, you almost always will get a slightly lower amount than the actual value of gold, when you sell to the local jeweller. Remember that most branded shops or reputed jewellers will have carat meters.
Now that you know about the 2 Ps of purchasing gold, ensure you don’t get sub-standard gold this Dussehra. Seasons Greetings!