‘If someone is giving 20% off on gold or ‘zero making charges’, there’s something wrong’

What should you know when going out to buy

gold

, and what is it that many jewelers won’t tell you? With the help of officials from MMTC (Metals and Minerals Trading Corporation of India), we bust some myths and answer some critical questions about buying gold.

What are ‘

making charges

’ and how do they vary?Making charges vary for plain gold jewellery and studded jewellery depending upon the intricacy of design, or if it is hand-made or machine-cast jewellery. Plain gold jewellery making charges should be around Rs200 per gm, and about 20% higher for studded jewellery.

Depending on various factors, the percentage of making charges can be as follows:
Machine-made jewellery - up to 6-8% making charges
Straight jewellery - 2-4%
Hand-crafted jewellery – maximum making charges

How can anyone offer a ‘

discount

’ on gold? And how are online prices of gold and other jewellery lower?It’s not possible to comment on the purity of gold everywhere, but if making charges are, say, 5%, they can be reduced to 4%, not more than that. If someone is offering a 20% discount on gold, there’s something wrong somewhere. The same goes for claims of ‘zero making charges’ - it’s best to check, since no jeweller will incur a loss. Online prices of jewellery are generally lower as overheads such as inventory carrying costs, holding costs etc. are lower.

READ ASLO:
Myths prevailing around Dhanteras

Some say 22 carat gold jewellery cannot be made since at that purity, gold is too soft. True?No, 22 carat jewellery certainly is made and sold in all markets, especially in the south. (As for cases of ‘fraud’ in caratage) Many jewellers have realized the value of earning people’s trust and goodwill and selling jewellery as per correct caratage in 22, 18 or 14 carat. It would be unreasonable to categorize all jewellers selling under-caratage jewellery, but unless the government makes hallmarking mandatory and selling under-caratage jewellery a punishable offence, it may still be a while till things change.

What should one keep in mind when reselling gold?If the India gold coin is returned to us at MMTC, we pay 24K gold value of that day without deduction. Most jewellers deduct between 1 and 6% for the same. They deduct melting charges and etc., often since they know the customer needs to sell the jewellery.

What else should a gold customer know that their jeweller often won’t tell them?Customers should be very careful about stones in gold – even if they’re very small, the weight should be indicated separately, they shouldn’t be weighed with gold. Buyers often ignore this, but it makes a difference. Also, check for joints and locks - if they are there in the jewellery, there is certainly some additive as well.
Also, customers should be alert about the price of the day, making charges, any other charges - basically, they should get complete details of the costing of gold, which customers often don’t have the time to understand.

-As per Ved Prakash, chairman & MD, and Preeti Kaur, chief general manager, MMTC Ltd.


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