If you are buying gold coins on the eve of Dhanteras and around Diwali, then it is critical to buy it from a seller or jeweller whom you trust fully. This is because hallmarking of 24 karat gold coins, bullions, bars is not mandatory as per law. Hallmarking is mandatory only for gold jewellery and artefacts. Gold jewellery hallmarking is mandatory for 24 Karat, 23 Karat, 22 Karat, 20 Karat, 18 Karat and 14 Karat purities as per law.
There are various sources from which an individual can buy gold coins, biscuits and bars. An individual can buy gold coins from the government mint itself and also from MMTC-PAMP (which is backed by the government). Coins can also be bought from well-known jewellers such as Tanishq, Malabar Gold & Diamonds, Kalyan Jewellers and others. Apart from that one can also buy gold coins from one’s local jewellery shop as well. Banks and NBFCs are also allowed to sell gold coins. One can visit the designated bank branch to buy gold coins. One can also buy gold coins from Muthoot Finance.
First: As the gold coins are not hallmarked, there’s no way of checking (except for physically testing/melting the coins/ taking them to BIS) whether the coin being sold is actually of the purity being claimed by the by the seller i.e., that you are getting the right value for your money. Hence, the trust factor while buying gold coins, bullions and bars of 24 Karat is critical to avoid being cheated.
Second: Many people don’t take a bill when purchasing gold in order to avoid paying GST which is not correct. You must take a proper bill from the seller when buying gold coins, bullion as that is the proof you will need in case the coin is later found to be of less purity. Without the bill, a seller can later say that the coin was not purchased from him in which case you would face a problem if the coin is found to be substandard. This could happen in case of jewellery too but at least jewellery is required to be hall marked offering some degree of assurance.
Third: Do remember that many sellers of gold coins, bullion do not offer a buy back facility whereas in case of jewellery most reputed sellers offer some kind of buy-back although it may be subject to conditions. So this is an important factor to check when choosing where you want to buy coins from.
Further the gold coins usually come in sealed packaging. If the packaging is torn at the time you want to re-sell it, then the purchasing jeweller will first test the purity of gold coins. Basis on the purity, the jeweller will pay you the amount accordingly. Packaging remaining intact may or may not be important part of the jeweller’s buyback policy, if any. Therefore, you need to be careful about the packaging accordingly.Another thing to keep in mind is that 24 Karat gold comes in two different purity levels – 995 fineness and in 999 fineness. The purity of 999 fineness level is higher than 995, hence, the price will also be higher. According to jewellers, the price of 999 fineness gold is usually 0.40% higher than 995 fineness gold. Make sure that if you are paying money for 999 fineness gold, then you should also get coin or bar having purity of 999 fineness gold.The highest level of 24 Karat gold one can buy are gold coins/bullion of 999.9 fineness. MMTC-PAMP offers gold coins with 999.9 purity levels Tanishq, a reputed jeweller, is offering gold coins in 24 Karat (999 fineness) as well as in 22 Karat on their website. Muthoot Finance, an NBFC, is also offering gold coins in 999.9 purity in various denominations ranging from 0.5 grams to 50 grams as per their website.
As per Bureau of Indian Standards (BIS) hallmarking is mandatory for 24 karat gold jewellery, artefacts in 995 fineness but not for 999 fineness. Jewellery in any case cannot normally be made in 999 fineness purity. Hence, if you are buying 24 Karat gold jewellery, then apart from BIS logo and Hallmark Unique Identification (HUID) number, 24KT995 will also be stamped on it. It will indicate 24 Karat having 995 fineness of the gold jewellery.
In conclusion, while we pay attention to price of the gold, it is equally important to know other aspects as well. These include Karat of the gold coins, fineness of gold coins/bars, resale terms of the jeweller, what if packaging is torn due to normal wear and tear, what if seller shut shops. One should evaluate a seller based on these factors before buying gold coin or bar.