The symbol of luck, wealth and prosperity, gold is one of the most popular metals regarding both investment and sale in India. The precious metal is favoured not only for the flashy adornments but also for the savings and good returns on the money invested in it. Indian weddings and major festivals like Laxmi Pooja, Diwali, Dussehra, are incomplete without it and these are the times when most people buy gold in its purest forms.
Apart from buying gold jewellery, a gold coin is another smart and direct way of investing in gold. These coins are usually round in shape and are available in different purity levels and various sizes from 0.5 to even 100 grams.
Indians buy coins for three main purposes: for family or corporate gifting, for auspicious or religious significance and personal investments. It remains in high-demand during festivals and wedding seasons. Festivals like Diwali, Dhanteras and Akshaya Tritiya are believed to be lucky and propitious to purchase gold as per Indian culture. It is also said to be a good investment because of its transparent pricing, negligible making charges, and good returns. Individual investors also purchase coins for savings purpose. Corporate companies also buy large quantities for gifting purpose.
Important things one should check before purchasing Gold Coins
Despite it being easy to purchase, there are a few things that need to be kept in mind before buying any gold coins:
Before making a purchase, always check the purity of a gold coin. The purity of gold coins is basically measured in two ways - Karat and fineness. Karat is most normally used measure of gold purity. 24 Karat (24K) is the purest form of gold that contains 24/24 parts of gold. Likewise, 22 Karat gold understood from 22 parts of gold with two parts of other metals such as silver or zinc. It is mixed with other alloys in order to make the gold more durable for making jewellery.
Fineness is another parameter to measure the gold purity. As per the World Gold Council, even pure gold may contain some minimal amount of impurities which the manufacturer couldn't remove. Fineness in a gold coin is defined as the weight of pure gold in proportion to the total weight of the gold coin, including the impurities. Therefore, 24 Karat gold is 99.9% pure, and 22 Karat gold is 91.66% pure.
You cannot buy 24K gold jewellery, but it is always possible to buy a 24k gold coin. Gold coins can be bought in various gold purities 23 Karat, 21 Karat, 20 Karat or 18 Karat. However, for investment purpose, people mostly buy gold coins in either 22 karats or 24 karats.
It is also essential to check the proper weight of your gold coin before buying. Most manufacturers produce gold coins ranging from 0.5g to 100g, but usually, people purchase in weights of 10g and less. Although you can choose your preferred weight or denomination, the availability of the same will depend on the jeweller. Many manufacturers also create a standard range of small gold coins from 1g, 2g, 4g and 8g (also known as guinea).
Before buying a gold coin apart from its purity, you should also check if it is hallmarked or not. A hallmark is a trademark that certifies gold purity of a gold coin as per the Indian Standard specifications. Gold items are tested and certified at an official BIS (Bureau of Indian Standard) Hallmarking Center for their purity and fineness.
Make sure to check for these four components that are hallmarked on gold coins: the BIS logo, Purity in Karat and Fineness, Logo of the Assaying and Hallmarking Center, and the Jeweller's identification mark/number. These markings can save you a lot of effort and time in trying to authenticate the gold coins.
Buying gold coins is relatively more accessible and cheaper in comparison to buying gold jewellery. They offer the option to purchase the purest form of gold in the lowest weight of 0.5 grams with lower making charges as compared to ornaments that mostly have higher making charges depending on their craftsmanship. For gold coins, the making charges usually range between 8 to 16 per cent.
It is extremely essential to guarantee your purchase with a detailed bill from the jeweller you buy your gold coin from. Make sure that this bill mentions the vital details such as Karat, weight, the current price of gold per gram and making charges. You need to ensure that you get a permanent bill which accurately documents your gold coin buying giving proof of its purity as well as legality, mentioning the proper value of your purchase and evidence of legal ownership.
Another important thing to note is that if you are buying gold coins from a bank, do keep in mind that the bank will not buy back those coins as per the directive from Reserve Bank of India (RBI). So if you plan to resale them later, then try to buy gold coins from certified jewellers or online platforms. Also remember, gold coins or jewellery bought from one jeweller and sold to another will fetch you a lower resale amount. This is because the jeweller to whom you sell your gold country you only for the gold and not for the making charges, administrative fees, or profit margins that you paid while buying that gold from another jeweller.