Gold got cheaper: Top dos and don’ts for buying right

Gold just got more affordable. With customs duties on gold dropping from 15 per cent to 6 per cent and on gold doré from 14.35 per cent to 5.35 per cent, it’s a good time to buy. But before you make a purchase, ensure you’re buying pure and authentic gold. Here’s what you need to know.
 

Verify gold purity

First, always check the purity of the gold in the jewellery you’re buying. Look for a hallmark on the piece, which indicates certification by the Bureau of Indian Standards (BIS). This hallmark confirms the gold's purity and provides additional details such as the year of hallmarking and the jeweler’s mark.

Understanding hallmark symbols is crucial for assessing caratage, indicated by the letter "K," which represents the percentage of pure gold in the jewellery.

For example, 22kt gold, marked as "916," contains 91.6 per cent pure gold. Different gold types, like stone-studded, white gold, or rose gold, have varying caratages, with 18kt gold typically containing 75 per cent pure gold.

Check pricing

Once you confirm the purity, cross-check the price to ensure it’s fair. Gold prices fluctuate daily based on market rates, and jewellery stores usually display the daily rates of bullion.

By comparing these rates and calculating the price based on purity, you can ensure you’re getting a reasonable deal.

Don’t hesitate to negotiate the making charges, which are often a percentage of the gold price. Since making jewellery incurs labour costs, negotiating these charges can help you get the best value for your purchase.

Avoid common pitfalls

To make a wise investment, be aware of potential pitfalls. If you’re buying for investment purposes, be cautious with stone-studded jewelry, such as diamond earrings or ruby bangles.

Assessing the purity of stones can be challenging, and intricate designs often lead to higher making charges, affecting your investment's returns.

While there are over 13,700 BIS-hallmarked showrooms and 435 recognised assaying centers in India, not all areas, especially rural ones, may have these facilities.

Ensure you buy from reputable, BIS-hallmarked jewellers to guarantee authenticity and quality. Avoid stores offering unusually low prices without hallmarking, as it compromises gold purity assurance.

Selling and documentation

When reselling gold jewellery, avoid selling it to a jeweller other than the original seller. Many jewellers offer a buy-back policy guaranteeing 100 per cent of the net gold value, but selling to a different jeweller might result in deductions, particularly for making charges, reducing your returns.

Always ask for a bill for your purchase, regardless of the amount. This ensures transparency regarding taxes and transaction details and protects you from legal issues when reselling or exchanging jewellery in the future.