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As per World Gold Council (WGC), gold demand in India reached 210.2 tonnes during the third quarter of 2023 from 191.7 tonnes in the corresponding period of 2022. This data represents the importance of gold purchase among Indians. While the price of gold may increase during the festive season, why not consider buying gold right away? Read further on how you can plan your gold purchase for Diwali.

Important Points to Consider Before Buying Gold on Diwali

Here’s what you need to know during your Diwali gold purchase:

1. Gold Rate

The rate of gold can fluctuate due to a number of factors, such as:

  • Demand and supply

  • Transportation costs

  • Government policies

  • Inflation

  • Exchange rates

 

Therefore, if you plan to purchase gold on Diwali, keeping track of the gold prices can help you get this precious metal at the best rates.

  • Purity Standards

Checking the gold purity is also important since gold valuables are available in different carats. The 24-carat gold is considered purer than a 22-carat one. However, most gold items are made using the 22-carat specification. To ensure the purity of your asset, check the BIS or hallmark engraving.

  • Making Charges

After the gold is mined, jewellers and artisans use their skills to turn the gold into jewellery. Jewellers apply a making charge to compensate for this labour, which increases the cost of the gold item. To get the gold at a lower cost, look for a jeweller that charges a lower making charge.

  • Taxation Rules

You need to pay GST on gold jewellery as well as gold bars since they are considered ‘Goods’ under the GST rules and regulations. The current GST rate for gold is 3%. You need to pay this tax in addition to the cost of the item. Therefore, checking the current rules can help you plan your purchase better.

  • Reputation of the Jeweller

It is important that you choose a trustworthy and reputable jeweller to purchase the gold items on Diwali. This is because many jewellers mix similar-looking metals with gold, claiming that it is absolute gold. Also, remember to get the gold certificate and invoice and enquire about the return policy.

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Various Gold Buying Options to Invest in During This Diwali

Nowadays, you can invest in gold in various forms. Here are some of the options that you can explore:

1. Physical Gold

This is the most common option since it provides instant ownership of the asset and high liquidity. You can purchase physical gold in the form of:

  • Gold bullions

  • Gold coins

  • Gold jewellery

2. Digital Gold

Digital gold, like physical gold, is available at current market rates. You can also purchase digitally and store it in your digital account. This type of gold purchase is beneficial since it ensures adequate safety of your asset, high liquidity, and no hassle of storing it at your home or in a locker.

3. Sovereign Gold Bonds (SGB)

Sovereign Gold Bonds (SGBs) refer to government securities that are denominated in grams of gold. They are a substitute for physical ownership of gold. The Reserve Bank of India issues these bonds on behalf of the Indian Government. 

 

Investors of SGBs pay the issue price in the form of cash, and redemptions are also made in the form of cash at maturity.

FAQs on Buying Gold on Diwali in 2024

The highest purity of gold is 24 karats. However, due to the softness of the metal, it cannot be made into jewellery. You can get jewellery of 22 karats.

You need to pay 5% GST on the making charges of gold jewellery.

The SGB Series 2023-24 Series is available from 12th Feb - 16th Feb, 2024.

 

It is always ideal to check panchang or other credible sources to get the exact timing.

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