- Date : 26/10/2016
Planning to buy Gold this Diwali, here are few tips
Who doesn’t love gold? It’s shiny, ornamental, and warm, rich glow is pleasant to the eye. It is also considered one of the most popular precious metals world over. But have you ever wondered why gold is so expensive?
Due to several factors it is valued highly such as it an excellent hedge against inflation and is capable of retaining its value even during times of financial uncertainty. It can also be liquidated quite easily and there is close to no risk when buying it, making it an ideal investment option.
However, buying gold is not always simple, and there are a few things that you need to keep in mind to ensure you get the best possible deal.
1. What is the per gram cost?
Before you buy gold, the first thing that you should do is check the per gram cost. This will give you an idea of the current price of gold in the market. Gold prices can vary at different showrooms because they come from different associations of gold jewellers. However, the biggest jewellers usually have similar rates.
To know the current per gram cost of gold, research on trustworthy websites or you can even ask different showrooms for their rates and compare.
2. What is the level of purity?
Gold comes in different levels of purity and this has a huge impact on the cost.100% gold, or 24K gold as it is also considered, is the purest form of gold. It is known to be extremely malleable.
For instance, 22k gold is 91.6% gold as it contains 22 parts gold and 2 parts of other metal. This is mostly used for ornamental purposes. Likewise, 18k gold is made up of 18 parts of gold while other metals make up the other 6 parts, making it 75% gold. Research the type of gold you want and the different rates based on purity levels.
3. Does it have genuine certification?
You should never buy gold that does not carry certification by BIS (Bureau of Indian Standard) because it may not be the real deal. In our country there are over thirteen thousand BIS hallmarked jewellery showrooms, that ensure that gold is of genuine quality and adheres to certain standards.
Thus, whether it is gold jewellery to wear or a gold coin as a means of investment, make your purchase only after you see evidence of the BIS hallmark.
Related: Gold vs Real Estate- The Face Off [Infographic]
4. Are there any other charges?
Sometimes the price of gold includes other charges, as well. Gold sellers may not always tell you the charges, unless you ask, so make sure you ask. In addition to the per gram price, you might also have to pay for making charges and wastage. These additional costs differ based from seller to seller
For instance, if you buy a 10gm gold bracelet for Rs 40,000, you are essentially paying Rs 4000 per gram. Consider the current per gram cost, and the difference is what you are actually paying as other charges.
Intricate pieces may be more impure, as jewellers sometimes have to add more copper to make the gold more malleable. This adds to the cost of making charges.
5. What are the buy-back terms?
You should always check what the seller’s buy back terms are. Find out how much the jeweller is willing to offer you if you want to exchange it later. While it is unlikely that you will get the full rate that you paid during your purchase, you may be assured of exchange or sell-back opportunity on the piece.
Make sure you ask for a bill with your purchase. A bill that includes important details of your transaction is vital in maintaining transparency. It also makes it easier for you to approach authorities in case of any discrepancy.
Keep this list in mind the next time you buy gold, so that you get the best deal.