Gold prices have been witnessing continuous fluctuations lately; at times, they surge rapidly, while at others, they plummet sharply. Recently, prices have been on a downward trend for several weeks, sparking a buying frenzy in the bullion market. People are rushing to purchase gold, believing that the current lower prices present an excellent buying opportunity.
But wait! A hasty decision could lead to a significant financial loss rather than a gain—especially when the volatility is driven by international factors like the situation in West Asia and global economic instability. In such a scenario, it is crucial to invest and purchase wisely.
If you are planning to buy gold during the festive season, here are seven essential things you need to know:
1. Never buy gold without a hallmark
Checking for the BIS Hallmark is the most important step when buying gold. Do not rely solely on a jeweler's sales pitch. Genuine gold jewelry must bear the BIS logo and a 6-digit HUID (Hallmark Unique Identification) number.
2. Understanding the 'Carat' math
Gold purity is measured in carats, which directly impacts the price. Always pay attention to the markings on the jewelry:
24-carat gold is marked '999'.
22-carat gold is marked '916'.
18-carat gold is marked '750'.
Remember, the higher the carat count, the purer the gold.
3. Verify authenticity yourself
In today's digital age, there is no need to trust a jeweler blindly. You can verify the authenticity of gold using your smartphone. Simply use the 'BIS Care App,' enter the jewelry's HUID number, and check its purity and other details. 4. Don't forget to get a proper bill and invoice
Never forget to obtain a proper bill from the jeweler when purchasing gold. Ensure that the bill clearly lists the gold's weight, purity (karat), HUID number, and making charges separately. You should also be aware that a 3% GST applies to the gold itself, while a 5% GST applies to the making charges.
5. You have the right to a lab test
Do you have even the slightest doubt about the purity of the gold you purchased? Don't worry; you can get your gold tested at any BIS-recognized laboratory for a fee of just ₹200. According to regulations, if the gold turns out to be of lower purity than claimed, the jeweler is liable to compensate you.
6. 'Paper gold' is also an excellent option
If you are buying gold solely for investment purposes and have no interest in wearing it, investing in Gold ETFs or Gold Mutual Funds might be a better choice than buying physical gold. These options eliminate the risk of theft and the hassle of verifying purity.
7. Avoid the 'making charges' trap
Seeing a crowd of customers, many shopkeepers lure buyers with offers of "huge discounts on making charges." In reality, however, they inflate the price of the gold to secure their profit, ultimately causing a loss for the customer. Do not fall for this bait. Always check the prevailing market rate for gold before making a purchase.
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