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7 must know tips to buy gold coins in Chennai
Posted on: 17/Jun/2019 10:16:08 AM
In a country like India, gold is purchased occasionally during festival times, family celebrations, Akshaya Tritiya, or others. There prevails also the practice of buying gold in the form of coins or bars. This option is much preferred because one can buy as low as 0.5 grams. So if you have got an idea of buying the same, here are 7 factors you need to ensure before grabbing your coins or bars.
What is the purity of gold coin you want to buy?
Purity of gold is measured either as Karat or fineness.
Karat – this is the most common gold purity measurement standard. The purest form of gold is of 24 karat where all the 24 parts of gold are made of gold itself. Next is 22 Karat gold where 22 parts of gold and 2 parts of any other metal like zinc or silver is used. This is commonly observed in gold jewelries.
Fineness – this is the second parameter to measure purity of gold, especially that of 24 Karat gold. The World Gold Council states there may be traces of impurities or mixed metals even in the purest form of gold. This may be because the manufacturer has not removed the impurity. So, as far as the fineness of gold is concerned, it is the proportion of gold in its weight. It is generally measured as parts per 1000. In the purest 24 Karat form of gold, the fineness measured will be 999.9 parts per thousand.
Experts say, it may not be possible for one to buy 24 Karat gold in jewelry form, but it will be possible in bullion form.
How is the gold packed?
When buying gold, make sure that it is packed in tamper-proof packing which acts as a protection for the package from any kind of fraud or damage or counterfeiting. According to experts, if you want to resell the gold coin you have purchased, you ought to keep in mind not to open or tear the tamper-proof pack in which the gold coin is packed. Note that the tamper-proofing given is a sign of credibility of the gold coin.
Making charges of gold
If you ask us which is lenient between gold coins and gold jewelries, it is easily said that the coins are the easiest. You can buy gold of very less weight of as low as 0.5 grams with the least making charges when set against gold ornaments like bangles, haram or earrings. Generally, the making charge imposed on gold is of the range 8-16% in most cases. Based on the craftsmanship involved, the making charge may even get higher.
Hallmarking
Hallmarking is the next important aspect one needs to check while buying gold. In India, there is the Bureau of Indian Standards (BIS) that functions to make sure customers do not get cheated when they buy gold. BIS is the board that certifies both gold and silver metals b by giving it jewelry stamping as an assurance of purity level.
As of 1st January 2017, there are 4 types of hallmarking done on gold which are BIS logo, Karat and fineness purity standards, logo mark by the hallmarking centre, and identification mark by the selling jeweler. It is to be noted that earlier to 1st January 2017, there was also the practice of including the making year as the 5th component of hallmarking.
According to BIS norms in the present day, gold of specific karats are only given the hallmarking. Nevertheless, it is possible for a person to obtain the purity check done for gold of any Karat from the board of BIS.
How easy it is to sell back the gold?
As you are done with buying the gold, what is the case of selling? According to Reserve Bank of India directive, banks are not allowed to get back gold coins. They are authorized only to sell them and not get it in return.
It is a fact that gold in the form of jewels or coins, once purchased from any source – be it jeweler, bank or others, it will have very low resale amount, as the making charges, administrative fees, and other margins of profit are not included at the time of resale. So consider the possible ways to resell your gold coin or jewelry right when you buy.
Where to buy?
Do you think gold can only be purchased from a local jeweler? If so, you are wrong. There are many different ways of buying gold in the form of ornaments of coins. Banks, e-tailers, stock holding corporation of India, government-authorized public sector units, non-banking financial units, and there are many who sell gold.
The minimum volume of gold you want to buy will differ from one to another. There are gold coins of as low as 0.5 grams available with non-banking financial units. These may be available as 24 Karat and 999.9 fineness. These coins in turn come with designs of gods and goddesses.
Coming on to banks, there are 24 Karat gold coins available in most banks like Canara bank. They have 5 gram or 8 gram or 10 gram gold coins.
Gold denomination
Generally, the market has gold coins in different denominations starting from as low as 0.5 grams up until 50 grams. Hence, coming on to the approximate gold rate in market now which is Rs 31,447 as of 3rd May 2019, you will have to spend about Rs 1500 to Rs 1600 for buying at least 0.5 grams of gold coin which is of 24 Karat. Note that this does not include any making charge, GST, or others. Note that the denomination of gold you buy depends on what the jeweler deals with.
The verdict
You need to make significant investmentnt in buying gold. It is not an easy job. Spend enough time and efforts before you opt buying the metal so that you always have good return on investment and you make wise decisions in your purchase.
