The price of gold is increasing. The increase in gold price is mainly due to fresh buying opportunity of upcoming Diwali festival. Many Indians plans to buy a gold during festival season. Buying a gold during Diwali festival is considered as auspicious. They either buy physical gold in the form of gold coin, bars or ornaments or they purchase e-gold via ETF route. If you are also planning to buy gold, please consider the following things.
Also Read – 5 Signs for checking purity of Gold
10 Things to check before buying Gold
- Gold Price
The first thing to consider before buying gold is the price of Gold. The price of gold is variable and depended on multiple factors. Make sure that you are buying a gold at a reasonable price. You can check the gold rate from online websites. It is advisable to go through historical gold rate, in case you are buying a gold for investment.
- Purity of Gold
The second thing to check before buying gold is the purity of gold. There are two ways to measure the purity of gold. First is gold karat and second is fineness. Karat is a widely used term for the purity of gold globally. 24 Karat gold is considered as a purest form of gold. However, for gold ornament 22 Karat gold is used. In case of a gold coin, one can buy 24 Karat Gold.
If you are buying a physical gold you should check for hallmarking. Hallmarking is mandatory on gold coins and ornaments. The government of India has setup BIS (Bureau of Indian Standards) to ensure that customers are not cheated when they buy gold. BIS certify gold by embossing BIS logo, purity in carat and fineness, a logo of hallmarking center and jewelers identification mark and number. One should always check hallmarking when they buy gold.
- Making Charges
Another important factor that affects gold price is making charges. It is variable and depends upon jewelers, type of gold ornament and craftsmanship. If you are buying gold coin making charges are in the range of 8-16%.
- Option of Buying
There are multiple ways to buy gold. People generally buy gold from a local jeweler or branded jewelery showroom. However, there are many other options of buying gold such as online website, MMTC, Muthoot finance etc. If you are buying a gold coin you can even approach the bank for buying. Many banks offer 24 Karat gold coins in the various denomination.
- Ease of selling
One should also consider ease of selling before buying gold. If you purchase gold ornaments, please note that making charges, administrative cost, profit margin and tax would not be paid back when you sell it. Also note that the buyback option is not available in case of gold coin.
If you are buying gold you should also check proper denomination. Gold coins are available from 1 gm to several grams. You should buy gold based on your requirement and availability of money.
- Form of Gold
Gold is available in various forms. You can buy gold coin, gold ornaments, e-gold or gold ETF. e-gold and gold ETF are beneficial compared to physical gold. Physical gold requires storage, handling and security. You will also pay more money for physical gold. (Gold ornaments).
- Discount Offer
One should also consider discount offer available with vendor before buying gold. Most of the vendor launch various discount and Diwali offers on gold. You should study the offer carefully before opting for any offer.
It is very important to check necessity of buying gold before taking actual buying decision. One should not buy gold for investment or for storage. Gold should not exceed above 10% in your portfolio. If you are buying a gold as a tradition you can buy single gold ETF or 1 gm gold coin.
I hope the above information will help you in taking the appropriate decision of buying a gold.