Weddings, festivities or a shield against financial uncertainties, gold can serve various purposes. Having said that, buying gold jewellery can serve a dual purpose – it can be a fashion accessory and act as an investment.
The sparkles of gold jewellery might entice you, but it is crucial that you do not make any hasty decisions. Purchasing gold jewellery might seem easy, but it is important to stay up-to-date to make an informed buying decision.
The following sections mention a few tips on how to buy gold jewellery. So, read on.
Gold’s price varies by city due to demand, import costs, and other factors. Cost of transportation, octroi charges, taxes, and other charges incurred in obtaining it determine its daily rate. Gold rates, for example, are lower in port cities than in interior cities. Every city's gold price is updated twice a day (morning and evening). Further, labour cost in the production of ornaments varies across cities, influencing gold rates for each product. Before purchasing gold, it is critical to understand the current gold rate in your city.
It's too common to make mistakes when trying to buy gold at the best price. However, remembering the dos and don'ts of purchasing gold jewellery can help you get the most out of your investment. Here are a few tips for buying gold factoring in the dos and don’t’s.
1. Check the Purity
The first step is to determine the purity of the gold used to create the jewellery you're focused on. The best way to determine the purity of gold is to look for the hallmark on the piece of jewellery. The official proportion of gold used is stamped on a hallmark. The Bureau of Indian Standards is the official agency in India in charge of certifying and hallmarking gold jewellery (BIS). So, whenever you buy gold, make sure it is BIS-certified.
2. Assess the Price
This is one of the most crucial tips to buy gold. Cross-checking the pricing is just as important as checking the hallmarking. The price of gold depends on its purity. The price of the precious yellow metal fluctuates daily based on market conditions. Jewellery stores throughout India display the daily bullion rates for their customers. To get an idea of how to calculate gold prices, subtract gold's purity from the bullion's price.
3. Learn the Basics
Any piece of jewellery with a hallmark has a unique number that is usually features with the BIS stamp. It also bears the year of hallmarking and a mark to identify the jeweller. Find the letter "K" to figure out what the caratage is. This denotes karat or the purity percentage. For example, when you buy 22kt gold rings, you're getting 91.6% pure gold. 916 is frequently engraved in jewellery with this caratage. Stone-set ornaments and white and rose gold ornaments are typically made of 18kt gold, which contains 75% pure gold.
1. Do Not Go for the Cheapest Option
If a piece of jewellery is cheap but not hallmarked, don't buy it from a store. This makes it critical that you only purchase ornaments from a reputable, BIS-hallmarked jeweller. To make your life easier, the BIS website contains a comprehensive list of the country's hallmarked jewellers. If you are not satisfied and still have concerns about a future purchase, you can contact BIS.
2. Do Not Buy a Jewellery Without a Bill
This is yet another crucial gold buying tip to remember. Purchasing jewellery is not an easy task. You must pay taxes, and if your purchase exceeds Rs. 50,000, you may be required to share your PAN details. As a result, many people purchase jewellery without receiving a bill from the store. This can get you in trouble, especially if you exchange or resell the jewellery.
Gold’s price depends on its weight or per gram. It fluctuates daily across different locations. You must check the rate on the date of purchase using various sources, including reputable websites. Jewellers also provide the daily gold rate based on the charge per gram. When purchasing an ornament, carefully inspect its weight and calculate the cost based on the gold price on the day of purchase. You must exercise extreme caution if you purchase a piece with precious stones, such as diamonds. To avoid paying extra, ensure the gold is weighed and billed separately.
Jewellers provide an option of buyback to allow you to exchange your old jewellery in order to stay current with fashion. Although gold’s value remains constant, the jeweller will deduct making charges when accepting the gold. They will calculate gold’s value on the buyback date based on current rates. You will only receive a return based on the current gold rate, regardless of the date of purchase. One of the best tips to buy gold jewellery is to consider the seller's buyback policy. As a result, you must discuss and comprehend your jeweller's buyback policy. According to the RBI, the buyback option is unavailable if you buy gold coins from a bank.
Since gold is a precious metal, it is essential to indulge with caution while buying gold jewellery. Consider the above-mentioned tips before you embark to purchase this yellow metal.
The comparison between gold bars and jewellery depends upon your individual preferences. These gold forms exhibit different characteristics and are an excellent investment option. However, when it comes to gold bars, they are more expensive to buy, and it can become difficult to sell them. Additionally, they do not work in barter.
To determine whether gold jewellery is authentic or not, you need to search for a hallmark sign. If a piece of jewellery misses this sign, it indicates that it might be a fake.
In India, the best month to buy gold jewellery is around the time of Dhanteras, as this is when Goddess Laxmi is worshipped.