Many people buy gold jewellery on Dhanteras eve and around Diwali because it is considered auspicious. However, it is important to note that gold jewellery is normally available in either 22karat, 18Karat or 14Karat purity. This is because gold with 22Karat, 18Karat and 14Karat level of purity is considered good – in terms of strength and malleability of the metal -for making jewellery.
In the case of diamonds set in gold, 18Karat gold is used to make the jewellery as purer gold of 22 karat is considered too soft to securely hold the diamonds. The price of gold quoted by the newspapers is 24Karat gold (999 purity) which is traded on the MCX. As the purity level of 22Karat will be lower than 24Karat gold, the price will also be on the lower side.
Given below are the prices of 22Karat, 18Karat and 14Karat gold from India Bullion and Jewellers Association Ltd. (IBJA).
|Gold Karat||Fineness||Price of gold (Nov 9, 2023 AM rates)||Price of gold (Nov 8, PM rates)|
|24 Karat||999||Rs 60,117||Rs 60,540|
|24Karat||995||Rs 59,876||Rs 60,298|
|22 Karat||916||Rs 55,067||Rs 55,512|
|18 Karat||750||Rs 45,088||Rs 45,452|
|14 Karat||585||Rs 35,168||Rs 35,453|
*Price is per 10 grams; Source: IBJA rates. The prices are updated with a lag. The AM prices are usually updated by 12 PM and PM prices are updated by 6 PM.
These above-mentioned prices are to be considered as reference rate only. This is because there can be additional costs that a jeweller has incurred on the gold. These are different from the making charges that are levied on the jewellery. Some of these expenses can be shipping costs, insurance costs etc.
The IBJA provides gold rates twice a day. There are Gold AM (first half of day) and PM (second half of day) rates. These rates are benchmark rates for issue of Sovereign Gold Bonds as per notifications issued by Ministry of Finance and Reserve Bank of India. IBJA rates are also benchmark rates for lending against jewellery by NBFC and Bank as per RBI notification.
Other things to keep in mind while buying jewellery
While it is important to know the gold price, there are other aspects as well one must be careful about while buying gold jewellery. Some of these aspects are how the final cost of gold jewellery is calculated by the jeweller, purity of the jewellery and hallmarking signs on it, pricing in case of diamond jewellery and so on.
How price of gold jewellery is calculated
A jeweller arrives at final price of gold jewellery using the formula mentioned below:
Price of gold (22Karat/18Karat/14Karat) X Weight of gold jewellery (in grams) + Making charges + GST at 3% + Hallmarking charges.
If there is any stone affixed on jewellery, then price of such stones must be separately mentioned.
If you are buying diamond jewellery
If you are buying diamond jewellery, then a jeweller is required to separately calculate the price of diamond and gold. There is no specific benchmark to use as a reference for diamond prices. The price of a diamond depends on 4Cs – Colour, Clarity, Cut and Carat weight.
Purity of gold jewellery
In recent years, the government has taken several measures to help customers check purity of the gold jewellery they are buying. From June 16, 2021, the government has made gold hallmarking mandatory. Hallmarking is mandatory for 6 purities of gold in terms of Karats – these are 24Karat, 23Karat, 22Karat, 20Karat, 18Karat, 14Karat gold.
Further from July 1, 2021, the government has revised the signs of hallmarking on gold jewellery. Now gold hallmarking will consist of three symbols – BIS Standard mark, Purity/Fineness grade and 6-digit Alphanumeric code (HUID code).
From April 1, 2023, the government has allowed sale of gold jewellery items with HUID code only. The HUID stands for Hallmark Unique Identification.
How making charges are levied
A jeweller can levy the making charges on gold jewellery either on a percentage basis or on flat rate basis. The making charges levied by a jeweller depend on the design of the jewellery. However, there are certain tricks that can help you save money on gold jewellery.
What a correct bill should look like
A buyer should also ensure that bill given by the jeweller mentions all the details of the jewellery bought. This includes quantity, weight of the jewellery, value of gemstones or diamonds (if any).
Also Read: What a correct bill should include