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Determining The Price Of Gold In India
Will the Indian shopper opt to buy gold this festive season? This is a looming question in the already fraught economy. There can possibly a two-case scenario: either the buyer will stay away from the precious metal considering the soaring price of the metal or the seller will be in for a rude shock as people will continue to choose the tradition of buying gold online as well as offline as usual. However, one thing that shall remain constant throughout in this is the continued price rise of the metals as analysts and economy experts see no respite from rising prices of gold.
As investors continue to remain jittery considering the pandemic and the slow recovery of the economy, wealth will be continued to park in the haven metal.
If you continue with your decision of buying gold this festive season we advise you to not fall prey to the premium charges charged by your local jeweler as there is no standard practice followed in the country for the pricing of jewelry. The invoice invoked by the jeweler too varies from one to another. Thus, with no set formula to look up to the buyer is often at the mercy of the jeweler. The chances as such for the customer to get duped are therefore very high. Also, every city in the country has its own jewelry association and though the gold prices online as well as offline are mainly determined by the international price in the market, a large part of the value of the metal is also determined by the demand and supply chain in the country. The gold rate is declared by the association every day before the beginning of the trade and therefore there is a variation in the price of the metal from one town to another.
The final price of the jewelry is calculated in the following manner:
The final price on the product= price of the gold (whatever the karat of the piece brought, 18k, 18k or 22k) X the weight of the piece (in grams) + the making charges + GST at 3% (on price of jewelry + making charges).
While buying gold jewelry one should keep the following in mind before paying the final price quoted by the jeweler.
Stones: The stones in a gold studded jewelry need not be calculated with the price of the gold. The jewelers often easily dupe the unknowing customer by adding the weight of the stones to the gold in the jewelry and extracting more money. The weight of the stones is not accounted at the time of buying as well as selling so one should be careful and keep this into account while buying gold.
Purity: The price of the yellow metal is determined by the purity of it and one should clearly remember that while buying a piece of jewelry no one really checks the purity but puts their faith in the jeweler. Thus, checking the karat of the jewelry piece one is buying helps in determining the true worth of the jewelry piece.
Price of Gold: We have already ascertained that how the price of gold is determined in the country. The rate of the gold is published in daily news every day. One can simply check the same before entering the market for a buying spree. However, a slight variation in the pricing of gold from one jeweler to another is common due to the wholesaler they bought the gold from.
Making Charges: Making charges are the only price that a customer can bargain while buying gold. These are the charges levied by the jeweler, but the bargaining depends on customer to customer and from one jewelry piece to another.
Hallmark: A customer often tends to ignore the BIS hallmark purity, which is the true benchmark of the purity of the gold. This mark ensures the customer gets the value of his money while selling gold back. The BIS hallmark embossed on the jewelry indicates the centre at which the purity of the metal was checked and the jeweler’s identification mark.
A customer should understand the entire pricing system of gold to be aware of the billing system and the break-up of the gold jewelry bought online or offline. The customer should always demand a bill from the jeweler and ask for the break-up of the piece brought to ensure he/she gets a fair deal.
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