Things to Know
India's Inclination towards gold
India has a long standing affinity to gold. It is the metal of the gods, and gods of the
metals! It is the indication of the long lasting and evergreen heritage of this traditional country. Anything made
of gold is regarded infinitely precious and hence, commands respect.The heavier the gold, the more
prestigious the status is thought to be. Most of the women in India prefer gold to diamonds, and the gold market
in India is always loaded with fresh and vivid designs. Also, in comparison to diamond, the current gold rate is
lesser, and hence, more bought. read less
Difference between 24 Carat and 22 Carat Gold
24 Carat Gold: It is the purest form of gold and contains 99.5% of the precious yellow metal.It is quite
soft, pliable, brittle, and bendable.It is mostly used in medical and electrical equip ment including computers,
phones, and more.This is the most expensive form of gold.It is bright yellow in colour.
22 Carat Gold: It has 91.6% parts of pure gold. Rest of the parts are metals such as silver, copper, or
some others.It has 91.6% parts of pure gold. Rest of the parts are metals such as silver, copper, or some
others.It has a hard texture and thus cannot be easily moulded or bended.It is relatively inexpensive due to
lesser percentage of pure gold.It is mostly used for making jewellery, bars, bullions, and coins.
It is usually tainted due to the presence of other metals.read less
Factors Affecting gold price in India
Gold is one of the most popular investment tools worldwide, especially in India. Like other financial assets, the
price of gold also keeps fluctuating. While demand for gold is one of the key factors that determines its market
price, a gamut of other factors have a role too. Find below some of the factors
affecting daily gold rates.
Like any other commodity, demand and supply economics has a huge impact on gold prices. Increased demand with
constrained or low supply usually results in a price hike. Similarly, an oversupply of gold with stagnant or
weak demand can push the prices lower. In general, the demand for gold rises in India during the wedding and
During inflation, the value of the currency goes down. In such a scenario, may prefer to hold onto money in the
form of gold. This results in a spike in the prices of gold, which, in a way, acts as a hedging tool against
3. Interest rates
Gold and interest rates tend to have an inverse relationship. As the interest rates increase, people tend to
sell off their gold to earn high interest. Similarly, when the interest rates decrease, people tend to buy more
gold, thus increasing the demand.
A major part of gold demand in India comes from rural areas. This demand usually tends to escalate after a good
monsoon, harvest, and resultant profits.
5. Government Reserves
Many governments have financial reserves that are composed primarily of gold, and India is no exception.
However, if this reserve exceeds the gold sold by the government, the gold prices increase due to an
insufficient supply. In India, this reserve is maintained by the Reserve Bank Of India.
6. Currency fluctuations
Gold trade in the international market transacts in US dollars. During import, when the US dollars are converted
to Indian rupees, the gold price fluctuates. Usually, if the Indian rupee depreciates, gold import turns to be
7. Correlation with other assets
Gold has a low to negative correlation with all the major asset classes and thus, makes for a highly effective
portfolio diversifier. As per the experts, gold protects one's portfolio from volatility because the factors
that affect the returns from most asset classes do not influence the price of gold much. Some even believe that
as the shares of a company fall, an inverse correlation might develop between gold and equities.
8. Geopolitical factors
During geopolitical turmoils, such as a war, the demand for gold tends to go up as a safe haven for parking
funds. Thus, while a geopolitical turmoil negatively impacts the prices of most asset classes, it has a positive
impact on gold prices.
9. Octroi charges and Entry tax
Octroi charge and entry tax are local taxes levied by the tax authorities when goods enter their jurisdiction
(state/city). Octroi is levied when the goods enter a city, whereas Entry tax is levied when the goods enter a
state. Furthermore, if your gold is valued at more than Rs. 30 lakhs, a wealth tax is levied on it.
10. Making charges
Making charges are usually levied on gold jewellery and may differ from piece-to-piece, depending on the design,
as well as from jeweller-to-jeweller. read less
Global changes in gold prices
The price of gold in India is predominantly dependent on the global prices of the metal. Most of the gold in the
Indian markets in imported. When there is a change in the global rate of gold, the import values are altered
accordingly. The market price of gold in India is a direct reflection of the import prices. read less
The Gold reseve Measure
Almost all nations have their central banks. These governing banks of major countries hold back the metal along
with currencies for future use. The Reserve Bank does this too. When these banks all over the world acquire more
gold for reservation, it leads to a rise in the rate of gold.read less
Gold Buying Guide
Gold has been at the top of investor’s list for centuries now. One of the most popular forms of investments in
India, it is considered as an important tool of financial security. Besides the financial aspect, this yellow
metal also holds religious and cultural significance in many a culture, factors which also add to its market
However, investing in gold can be a tricky business and requires careful consideration of many factors. Here is an
extensive buying guide that’ll help you with your next gold purchase.
Purity of gold is one of the most important factors to be considered before gold shopping and is defined in terms
of “Carats”, with 24K being the purest form. However, 24K gold is present in a malleable liquid form and needs to
be mixed with other metals for sturdiness. For instance, 22k gold is a mix of 22 parts of gold, i.e. 91.6% and 2
parts of other metal alloys. The greater the level of purity, the more expensive gold is.
Physical gold can be bought in many forms- coins, bars, jewellery.
Some of the collectable gold coins have a higher market value than other forms of gold. However, authenticity
needs to be checked carefully before this purchase.
Investment quality bullions or gold bars usually come with purity levels of 99.5%-99.99%. You can find this
information stamped on the bar along with the weight and manufacturer’s name.
Gold Jewellery -
This is the most popular form and has a cultural significance too. However, the meltdown value is usually not as
high as the original price.
Genuine Gold Certification
In India, the purity of gold is certified by the Bureau of Indian Standard via hallmarking, defined as putting up
marks on precious metals. It is advised to always go for hallmarked gold, for an assurance of purity, as well as,
Physical Gold vs Gold EFT vs Sovergion gold Bonds
Physical gold, Exchange Traded Funds (ETFs), Sovereign Gold Bonds are some investment options in gold, which have
been the choice of various investors since long.
||Sovereign Gold Bonds
||You can store gold in form of jewellery, coins, and bars. The security of these assets is the
responsibility of the investor.
||ETFs are electronic and hence there is no storage requirement or fear of theft
||Do not require physical storage and can be safely traded
||There is no interest to be enjoyed. Gold is thus considered a safe but dead investment by many
||There is no interest rate to be enjoyed but the return on the investment could vary
||Some rate of interest can be enjoyed
||A wealth tax is levied on gold if their valuation is above Rs. 30 lakhs
||Gold ETFs are taxed as non-equity funds . Short-term gains and long-term gains are taxed as per the tax
||Sovereign gold bonds are taxed if sold before maturity. If they are held till maturity, there is no tax
on capital gains. Any interest earned is taxed.
Impacts of QE on Gold Price Today in India
Quantitative easing is widely known as QE. It is another component that impacts gold rates in India. In
quantitative easing, there is money supply in the economy for enhancing the consumption. Global central banks buy
securities which lead to the extra money supply in the economy. This extra money supply finds a way into global
gold investments, which pushes the prices of the metal higher.
An increase in the QE affects the gold rate today in India, which affects all the form of gold inclusive of the
popular 916 gold rates in India. Off late, QE happening around the world is not that much. The US is done with its
QE phase and there is some kind of easing happening in the countries such as Japan along with the Europe through
the various central banks.
At present, it seems very unlikely there will be QE in that country. When the world economy will face any
liquidity issues, gold rates could fall in the trade. Along with QE, there are some other components that lead to
gold rallying. The withdrawal of QE will bring a fall in the gold prices. The US is now winding down its QE; there
could be chances that gold rates in India could be impacted.read less
Why is Gold a good option to Invest in India
If you are keen to invest in gold, you’ll get a plethora of investment options in India. But before investing in
gold, you need to be clear about certain things such as why you are investing, the tax liability, the other
investment options and everything that you aspire to know about gold. Gold trading has picked the pace within a
short span of time by offering favourite investment avenues in India. Though Indian gold market witnessed a
stagger in the initial phase of this year regarding Indian Gold Rate, the stalwarts say this is a transitory phase
that will pass by soon. read less
What are the Various Gold options Available to Buyers
Physical gold is available in 24 karats, which is considered as the purest form of gold. The 22 karat is the
jewellery grade gold and 18 karat is less precious.
Here are the common formats for buying gold.
Jewellery (with/without precious gems/stones) - It comes with purity issues, safe keeping issues along with
the manufacturing charges. Gold rate is different from the exchange traded price.
Gold Coins - They can be of historic nature if they are collected from any archaeological digs. The coins
minted under the Central Bank guarantee the purity which is available in different denominations from 2 grams-50
Gold Bars - Minted by RBI at designated mints, these are guaranteed to be pure and these are available
through the selected banking institutions only. read less
How to Sell Gold in India
Before you sell your gold, you need to keep a few pointers in your mind so that you get best of the best deal.
Retain invoice: In order to be eligible to sell your gold to a reputed jeweller and getting the maximum
value from your investment, you must keep the original invoice with you.
Get it evaluated: Before you sell your gold, make sure you get its value checked twice or thrice so that
nobody can cheat you.
Check the purity of gold: Before you sell your gold, it’s important that you get it hallmarked. In case
your jewellery isn’t hallmarked then get its purity checked. Also, compare the purity and price with Gold Rate
Today to get an idea of the price you may be offered in exchange.
Pick a trusted shop: Make sure that you sell your jewellery at a reputed store so that you get a fair
price. read less
Gold Weight conversion Table
Refer to the following table to find out the value of gold in different units. Gold is often measured in grams,
kilograms, troy ounce, bhats, and tonnes....read more
|To Convert From
How is hallmark Gold Rate Determined in India Today
There isn’t any difference between hallmarked gold rate today and normal gold rate. Any gold seller doesn’t charge
extra money if you buy hallmarked gold. The rate at which the hallmarked gold and the normal gold are sold is the
same. The sole and most important difference is that you are ensured of purity when you buy hallmarked gold.
The important thing to keep in mind is that hallmarked gold price in India does not differ when it comes to the
pricing. The difference lies in the quality of the metal used. When you buy gold, buy good quality gold. It is
good to buy the hallmarked gold as it ensures the quality. Many investors have raised their opinions on the less
number of hallmarking centres available in our country. This is an important issue that needs to be addressed by
our government so that number of hallmarking centres can be increased. This will be of great help to the consumers
across India. read less
The Magnetic test to check gold purity
We are aware the fact that gold is non-magnetic. So, if it pulls towards the magnet, it’s not real. However, it
never shows 100% result, as sometimes non-magnetic metals are used with pure gold as well. To perform this test
you will require a strong magnet that you may find in a hardware store or in regular things such as purse latches,
old unused hard drive or children’s toys. read less
Purity of Gold
There are multiple ways to check the purity of gold.
Look for the Hallmark Stamp: Pure gold always carries a stamp. Reputed stores stamp the ...read more jewellery with
purity scale. To check the purity of your gold, simply place it under the magnifying glass and check for the
BIS Standard Mark: BIS is used as a benchmark stamp for the purity of gold. Every legal jewellery item will
carry this stamp on it.
If there is Any Discolouration: You can check the purity of your gold by noticing any discolouration or
not. If your piece is only gold plated, it will start showing a different metal under it and colour will be
Try with a Magnet: We are aware the fact that gold is non-magnetic. So, if it pulls towards the magnet,
it’s not real. However, it never shows 100% result, as sometimes non-magnetic metals are used with pure gold as
well. To perform this test you will require a strong magnet that you may find in a hardware store or in regular
things such as purse latches, old unused hard drive or children’s toys.read less
Taxes on Gold in India
Gold rates have slightly gone up as 3% of Goods and Services Tax (GST) is being imposed on gold jewellery. Before
GST, gold jewellers used to pay 1.5 excise duty, 1.2% VAT and 10% as customs duty on the gold purchase, which
comes around 12.43% tax. After 3% GST came into practice, the jewellers are now paying 10% for import duty, 18%
tax for making charges, which was zero before GST. And this effectively comes to 15.67%. However, with the
constant protest of Indian Jewellery Council, the government later fixed the tax on making charges at 5%. The
buyers now also have to pay an extra 3.24% tax as per GST rule while buying Gold jewellery. read less