Gold Rate Today in India

Throughout the course of history gold has been the most fascinating metal resource across the globe. Wherever on earth human civilizations chanced upon the shining substance, they treasured it like something either sacred or supernatural. For the Inca and other peoples of the Andean region of South America, gold was the "sweat of the sun," the most sacred of all deities. It was the ‘Gold Rush’ of the mid 19th century that led to the development of western coast of the US which was earlier primarily populated towards the eastern coast.

As far as demand for gold is concerned, India has been the largest consumer of gold, only to be overtaken by China in the last couple of years. The origins of the use of gold in India go as far back as the Indus Valley civilisation.

Over the centuries, gold, the only corrosion-resistant metal—a quality that makes it timeless—has come to be associated with purity. And in India, the land of spirituality and rich religious traditions, the purest has always been reserved for the divine.

Apart from its spirituality and divinity, gold is most significant in the contemporary era for its economic might. Gold is a universal liquidity standard making it the most sought after precious substance in the world.

Here are some facts you must know about the precious metal that is the yardstick of purity and luster throughout the world.

Gold prices differ from country to country, state to state, city to city and even at times from one retail store to another. There are diverse factors that determine the price of gold and all these factors are dynamic, interdependent and complex in the ways they play out in the market.

There is a change in the price of gold on an everyday basis because of the interplay of following determinants:

- London Bullion Market’s Spot price

- Bank transaction charges on Gold imports

- Custom Duty

- Market trends and government regulation in India

- Local taxes

- Making and wastage charges

Bullion is the term for gold and silver that are regarded as being in their natural, unprocessed state. Bullion is typically traded on commodity exchanges, where its value is determined by its weight and the price of the precious metal it contains at the time.

Bullion is a well-liked investment choice in India and is heavily traded on the nation's commodity markets. Bullion is in high demand due to its perceived value as a safe haven investment and its use in the jewelry sector.

In order to support the nation's economy and currency, the Indian government also keeps a strategic reserve of gold bullion.

There are two ways to indicate the purity of gold: Karat (denoted as KT) and the other is fineness number.

When purity of gold is measured in Karat, 24KT is considered the purest form of gold. But 24KT gold is considered too soft to be converted into any jewelry or ornament. Therefore, certain other metals such as silver and zinc are added to gold to convert it into jewelry.

Fineness number measures the purity of gold as parts per thousand. According to the World Gold Council website, 24KT should be 1.0, i.e., 24/24, but there is likely to be slight impurities in gold and can only be refined to a fineness level of 999.9 parts per thousand.

The government body called Bureau of Indian Standards (BIS) certifies the purity of gold. The process of certifying the purity of gold is called hallmarking.

According to the BIS website, there are two principle objectives of the hallmarking scheme:

1. To protect the buyer against adulteration

2. To obligate the producer to maintain legal standards of fineness and purity.

According to the BIS website, effective from January 1, 2017, hallmarking of gold is done only for three levels of purity. These are as follows:

The fineness number and BIS hallmarked on the piece of jewelry indicates that BIS has certified it to be of the fineness level/purity that is embossed on it as part of the hallmark. From June 16, 2021, it is mandatory for jewelers to sell hallmarked gold only.

Sovereign Gold Bonds (SGB) are government securities that offer an option to invest in gold without physically purchasing the precious metal. Investors can purchase securities in cash that are in denomination of grams of gold and can be redeemed on maturity.

The Reserve Bank of India issues gold bonds on behalf of the Government of India.

In comparison to keeping gold in physical form, the SGBs are a better option because they reduce storage-related risks and storage expenses are eliminated.

In the case of gold used in jewelry, SGBs are free from concerns like making charges and purity of metal. The bonds are kept in the RBI's books or in demat form, which eliminates the risk of scrip loss, among other things.

In addition, since the investor receives the current market price for the gold at the time of redemption or premature redemption, the amount of gold for which they pay is protected.