Gold Rate in India

Indians have since times immemorial had a deep fascination for gold, attaching a sentimental value to it. Indians invest in gold in different forms such as jewellery, gold coins, ETF, gold bonds, and so on. Investing in gold is a continuous process for Indians, which peaks around Diwali due to auspicious gold-buying days.

However, as someone interested in buying gold for marriages, daily wear, or investment purpose, it is important to keep track of the rates as Gold Rate in India keeps changing every day. Keeping an eye on the fluctuations will help you understand the best time to buy during the year, as you will be able to identify when the rates are at a comparative low. 

What Makes Gold Attractive to Indians?

There are several reasons that contribute towards making gold a sought after metal in India. Some of these are:

  • Gold is associated with the status symbol in India. Heavier gold ornaments are preferred over lighter ones even while gifting.
  • Gold is associated with purity, and hence people prefer to buy purer gold such as 24-carat, 23-carat gold, or 22-carat gold as compared to buying 18-carat or 14-carat gold.
  • Gold is cheaper than diamond and there are numerous reliable pure gold sellers in India. It is easily accessible in the Indian markets.
  • While gold ornaments are the best buy for marriages and everyday wear, investors suggest investing in gold either in the form of gold coins, gold bars, or ETFs. In fact since physical gold comes with additional making charges, experts suggest buying gold in the form of bonds and ETF to avoid the same.
  • The fact that gold in any form can be sold easily when there is a need for extra funds, makes the gold investment all the more lucrative.
  • When sold, gold gets you returns at par with the prevailing market rates minus the making charges.

Looking at the frequency of gold buying and selling in India, it is important to check gold rates for the day.

Factors Affecting Gold Rate in India

The rate of gold in India is influenced by several factors. Some of these are mentioned below:

  • Demand and supply of gold during a season. Marriage season sees exponential demand for gold in India, making the rates soar high.
  • Changing market scenarios locally as well as globally. Any dips or fluctuations in trade markets have a direct bearing on gold rates in India.
  • The strength of the US dollar and the performance of the Rupee in the Global market. Ideally, when the Rupee runs strong, gold rates fall.
  • City wise price of gold also changes in India due to factors such as taxes, local associations, carriage, etc.
  • The purity of gold: 22-carat gold is cheaper than 24-carat gold at all times
  • Government policies and changes in the political arena
  • Change in gold's global rates. Since India imports a lot of gold, any change in global gold rates change import values, thus changing the rate.
  • Rise in gold rates due to rise in global gold reserve measures
  • Taxes and import duties also alter gold rates in India. More the taxes, higher the per gram price of gold.

The extent of fluctuation in gold rates in India can be seen from the table below that shows the historical gold rates in India across the months of January 2019, February 2019, and March 2019.

The rates are indicated as a comparison between both one-gram each of 22 and 24-carat gold.

Trends in Gold Rates in India

Date Rate per gram of 24 Carat Gold Rate per gram of 22 Carat Gold

Gold Trends in January 2019

Gold rate in Dec 2018 closed on

3294.12

3080.00

Gold Rate on 1st Jan 2019

3294.12

3080

Highest Gold rate in Jan 2019

3459.89

3235.00

Lowest Gold Rate In Jan 2019

3262.03

3050.00

Overall Gold Trend in Jan 2019

Stays Flat

Stays Flat

Gold Trends in February 2019

Gold rate in Jan closed on

3454.55

3230.00

Gold Rate on 1st Feb 2019

3459.89

3235.00

Highest Gold rate in Feb 2019

3529.41

3300.00

Lowest Gold Rate In Feb 2019

3422.46

3200.00

Overall Gold Trend in Feb 2019

Declined as compared to Jan 19.

Declined as compared to Jan 19.

Gold Trends in March 2019

Gold rate in Feb closed on

3465.24

3240

Rate on 1st March 2019

3438.50

3215

Highest rate in March

3438.50

3215

Lowest Rate In March

3320.94

3105.08

Overall Gold Trend in March

Declined as compared to Feb 19.

Declined as compared to Feb 19.

Understanding Hallmark, KDM, and BIS 916 Gold

Since gold is a precious metal, its purity is of great concern to all regulatory bodies, buyers, and sellers. That is why the Bureau of Indian Standards (BIS) has classified gold into three varieties based on its purity. These are:

  • Hallmark Gold
  • KDM Gold
  • BIS 916 Gold

Hallmark Gold: It is a certificate issued stating the fineness and purity of gold. Hallmarking is done to assure buyers that the quality of gold is as per the international purity standards. This certification is operated solely by BIS, which is a recognised agency by the Government of India. Licensed jewelers can easily get their gold hallmarked at any of the numerous BIS hallmarking centers across the country. Hallmarked gold displays the hallmark sign laser engraved on the gold item along with other relevant details.

It is important to know that regular or hallmarked gold, both do not come at a different price tag. A gold seller cannot charge a customer extra for hallmarked gold. Both are sold at the same rate. However, the only difference between hallmarked gold and regular gold is that hallmarked gold comes with the assurance of purity.

KDM Gold: This is the gold jewellery that comes with cadmium-soldered joints in the ratio of 92% gold and 8% cadmium. Cadmium is the metal, which is used as a filler substance in gold jewellery and is supposed to have a lower melting point than gold. This way when gold is melted cadmium joints melt later and before that pure gold can be collected. Even though BIS specified the ratio of gold to cadmium in KDM jewellery, it is fast becoming obsolete.

BIS 916 Gold: It is a term used to indicate the purity of gold based on its carat. As pure gold is difficult to work with and shape into jewellery due to its soft and malleable properties, it is often mixed with an alloy to make it workable. Goldsmiths therefore use 22-carat gold to create ornaments. 22-carat gold is represented by the number 916, which means it is 91.6 grams pure gold used in an alloy of 100 grams.

Categorisation of Gold Based on Purity

Carat Referred As Purity

24 Carat Gold

999 Gold

99.9 grams gold in 100 grams alloy

23 Carat Gold

958 Gold

95.8 grams gold in 100 grams alloy

22 carat Gold

916 Gold

91.6 grams gold in 100 grams alloy

18 Carat Gold

750 Gold

75 grams gold in 100 grams alloy

Who Decides the Price of Gold in India?

These days gold mining does not happen in India as most of our mines are now closed. Therefore, most of our gold is imported from other countries. The gold imports help determine the wholesale rate of 22-Carat gold in India. Several bodies and importers play a role in determining this rate. Some of them are:

  • Government banks
  • Private banks
  • Private companies

Imported gold comes with VAT, import duties, and other charges and is then sold to wholesalers who further sell it to retailers across the country. The bullion association decides the ultimate price of gold in the retail market. While gold prices can change on a daily basis, they do not fluctuate much during a day.

What to Buy When You Want to Invest in Gold in India?

Here are some of the options that you can consider when you want to invest in gold in India and get good returns on your investment:

Jewellery: Buying jewellery that you would wear or use, as a keepsake for your kids is a good way to invest in gold. However, there are a couple of disadvantages of buying jewellery. First - you need to pay the making charges on jewellery which range anywhere from 15% to 25%. When you sell it, the buyer will not pay the making charges. Second - if the rate of gold is lower than the time when you bought it, you are likely to suffer a loss due to the making charges. Jewellery also is difficult to keep safe and requires a locker, which is an additional cost.

Bars and Gold Coins: When investing in gold bars or coin, make sure you buy them either from an authorised bank or a trusted jeweler. Take receipts and certificates. Buying from banks however, implies that there will be no buyback, whereas your jeweler is sure to buy back the gold they sell you whenever you want to sell it. Coins and bars are easy to manage than jewellery, as they do not come with the threat of breakage. In addition, they are available in a purer form of gold with 999 purity, which is unlike 22 Carat gold jewellery.

Gold Mutual Funds: These mutual funds invest in gold for you just like any other Mutual Fund schemes. It is possible to invest in gold Mutual Funds through a Systematic Investment Plant (SIP), which is easy to manage on a daily or monthly basis. However, there is payment of AMCs involved and that is why one must carry out thorough research before selecting the MF.

Gold ETF: The Exchange Traded Fund (ETF), is also a kind of Mutual Fund that invests your money in units of gold. You can buy a single gram of gold or its multiples through ETF which are listed on the stock exchange. This investment is possible through a trading and demat account. You also need to pay brokerage as well as fund management charges as per the norms.

Sovereign Gold Bond Scheme: For people wanting to invest in physical gold, the Sovereign Gold Bonds (SGB) is a much better option, as it is less risky. Several top commercial banks issue gold bonds from time to time. Although the rate of return is nominal at 2.75%, the gold bonds are redeemable at RBI specified rates. You can buy your SGB from post offices or the Stock Holding Corporation. However, the interest earned on SGB is taxable. SGB is popular for its interest, but the lock-in period becomes a deterrent for many to invest in them.

Tips to Sell Gold in India

If you are looking to sell your gold eventually here are some handy tips to keep in mind:

  • Always retain the invoices of your gold purchases. This lends authenticity to your gold and jewelers prefer to purchase such gold.
  • Gold invoices will help you get maximum value for your gold as its original weight and rate would be mentioned on the invoice.
  • Even if you have the invoice, you must still get your gold evaluated for purity and weight before selling it to avoid any discrepancies.
  • Get your gold's hallmarking done before selling it. This is possible by first getting its purity tested. Once hallmarked your gold will sell easily with the stamp of authenticity.
  • Always be aware of the day's gold rate to avoid being duped.
  • Always sell your gold at a trusted jeweler who holds a reputation of offering fair rates in exchange of your gold.

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