As the festive season approaches, many people in India are gearing up for celebrations, and buying gold is often a major part of the tradition. With the wedding season on the horizon, markets, especially the bullion market, are bustling with activity. Demand for gold is on the rise, driving up prices, and creating a perfect time for buyers to make purchases. But whether you’re buying gold for investment or as jewelry for special occasions, it’s essential to follow a few important tips to avoid losses.
Here’s a simple guide to ensure you buy genuine gold at the best possible value and stay safe from common pitfalls.
1. Understand Gold Purity Before Buying
Gold purity is measured in carats. The highest purity is 24 carat, which is 100% pure gold. However, pure gold is very soft, so it is not typically used for making jewelry. Instead, jewelers mix gold with other alloys to make it more durable.
If you’re looking for jewelry, 22 carat gold is most commonly used, which contains some alloys to strengthen it. For gold bars and coins, you can opt for 24 carat gold, as it’s purer and suitable for investment.
Always check the carat rating before making a purchase, especially if you’re buying gold jewelry, and remember that 22 carat gold is generally considered a good standard for jewelry in India.
2. Look for BIS Hallmark Certification
The BIS hallmark is a government guarantee of the purity of gold. Issued by the Bureau of Indian Standards (BIS), it ensures that the gold you’re buying is genuine and of the stated purity. Always insist on purchasing gold that carries the BIS hallmark, whether you’re buying jewelry or gold coins.
There are five key markings on BIS-certified gold items:
- The BIS logo.
- The purity in carats (e.g., 22 carat or 916).
- The logo of the hallmarking center.
- The year of hallmarking.
- The jeweler’s identification number.
Avoid purchasing gold that doesn’t carry the BIS hallmark, as it might not meet purity standards, and you may not get the value you expect in the future.
3. Making Charges: Be Aware and Negotiate
Making charges refer to the labor cost involved in crafting gold jewelry. The more intricate the design, the higher the making charges will be. It is common for jewelers to take advantage of the high demand during the festive season by charging higher making fees.
Many buyers accept the quoted making charges without bargaining, but it’s always a good idea to negotiate. Sometimes you can reduce the making charges by simply asking for a better rate, especially if you’re buying heavier jewelry.
If you’re buying gold coins instead of jewelry, the making charges are typically lower, ranging from 4% to 11%, compared to 8% to 15% for jewelry. If your primary goal is investment, buying coins may be a more cost-effective option.
4. Check the Packaging for Gold Coins
Gold coins are often sold in tamper-proof packaging, which ensures that their purity remains intact. This packaging is especially important if you plan to resell the coins in the future. Any damage to the packaging can affect the coin’s value, so make sure you purchase coins that come in sealed, tamper-proof packaging.
When purchasing gold coins, also verify that they are BIS-certified to ensure that you’re getting genuine and pure gold.
5. Always Ask for a Bill
Whether you’re purchasing gold jewelry or coins, always ask for a certified bill. The bill should mention all the necessary details, including the weight, carat purity, making charges, and the final price. A bill serves as proof of purchase and can be useful if you need to sell or exchange the gold in the future.
Even if you’re buying from a trusted jeweler, never skip taking the bill. It’s important for any future reference, especially for resale or insurance purposes.
6. Know the Current Gold Price
Gold prices fluctuate daily, often influenced by global market conditions. Before heading to the market to buy gold, check the current day’s gold rates to ensure you’re getting a fair deal. Many jewelers display the latest gold rates in their stores, but it’s always a good idea to verify the prices online as well.
By staying informed about the current rates, you can avoid being overcharged or misled during your purchase.
7. Set a Budget and Stick to It
It’s easy to get carried away when buying gold, especially during the festive season when jewelers offer attractive designs and promotions. To avoid overspending, it’s crucial to set a budget before visiting the store. Plan your purchase according to your budget and avoid impulse buying, which can lead to financial strain.
If you’re buying for investment purposes, consider purchasing gold bars or coins instead of jewelry, as these typically come with lower making charges and hold their value better.
8. Understand Gold Loan and Exchange Policies
Many buyers choose to purchase gold with the option of taking a loan against it in the future. If this is something you’re considering, inquire about the jeweler’s gold loan and exchange policies. Some jewelers offer attractive exchange rates for old gold, and knowing these policies can help you make an informed decision when buying gold.
By following these simple tips, you can ensure that your gold purchase is safe, secure, and gives you the best value for your money. Whether you’re buying gold for personal use, a special occasion, or investment purposes, taking the time to understand the nuances of gold buying can help you avoid losses and make the most of your investment.
