7 things to know while buying gold coins this Dhanteras

There are two methods to assess the purity of gold coins: Karat and fineness. Karat is the more widely used standard for measuring gold purity. 24 Karat (KT) is regarded as the purest form of gold, consisting of 24 parts of gold out of a total of 24. In contrast, 22KT gold contains 22 parts of gold along with 2 parts of other metals, such as zinc or silver, to enhance its durability for jewelry making. Fineness measures gold purity, especially for 24KT gold. According to the World Gold Council, even 'pure' gold may have minor impurities. Fineness is the weight of precious metal relative to total weight, expressed in parts per 1,000. The purest gold, 24KT, has a fineness of 999.9 parts per thousand.

When purchasing a gold coin, it's important to not only consider its purity but also to verify if it has a hallmark. The government of India established the Bureau of Indian Standards (BIS) to protect consumers from being deceived when buying gold and other products. BIS authenticates gold and silver coins and jewelry by marking them (engraving its seal on the item) to verify the purity level of the product. According to the BIS website, the mandatory hallmarking order does not apply to gold bullions or coins. Nevertheless, gold bullion and coins with a fineness of 999/0995 can be hallmarked by BIS-approved refineries or mints. Additionally, starting from July 1, 2021, the elements of hallmarking have been updated. Hallmarked gold now features three elements: the BIS logo, purity, and a unique 6-digit alphanumeric code.

It's advisable to buy gold coins that are enclosed in tamper-evident packaging. This type of packaging helps safeguard against counterfeiting, fraud, and physical harm. Jewelers recommend not to open or damage the tamper-evident packaging of the gold coin if you intend to resell it later, as the packaging ensures the authenticity of the gold's purity.

Gold coins typically come in various weights, from 0.5 grams to 50 grams. Nonetheless, it's important to verify with the jeweller about the specific denomination you want to purchase.

Acquiring gold coins is generally simpler than purchasing jewelry. They provide the opportunity to obtain the highest quality gold, starting from a minimum weight of 0.5 grams, with lower manufacturing costs compared to items such as earrings and rings. The manufacturing charges for gold coins typically range from 8 percent to 16 percent. Conversely, the making charges for jewelry usually begin at 8 percent and can increase based on the level of craftsmanship involved.

In addition to local jewellers, gold coins can also be purchased from online retailers, banks, MMTC (a government-approved public sector organization for selling gold and silver), and selected non-banking financial firms. Moreover, gold coins can be acquired from the Indian Government Mint as well. However, the minimum denominations of gold coins may differ depending on the entity.

If you have purchased gold coins or are considering buying them from a bank, remember that they will not repurchase those coins as per a directive from the Reserve Bank of India (RBI). Typically, gold coins or jewelry bought from one jeweler will yield a lower resale price when sold to another jeweler.