Today’s Gold Rate in Ludhiana

Gold bullion dealers in Ludhiana don’t decide the gold rate rather they take the base price set by London Bullion Market Association (LBMA) and add applicable taxes as per the prevailing tax laws in the state.

Gold prices are derived from the London Over-the-counter market and COMEX gold futures market trading. Although the international gold rate has an impact on the gold rate in Ludhiana, the latter doesn’t affect the former one. The Indian Bullion Jewellers Association (IBJA), apex jewellery and bullion body in India, plays a key role in determining day to day gold rate in Ludhiana and across India as well. Through the given formula, one can calculate the final price of their gold jewellery:

Final price of the jewellery = Price of the gold (22/18/14 Karat)* Weight in grams + Making charges + GST at 3% on the price of (Jewellery + making charges)

After the roll out of GST (Goods & Services Tax) in July 2017, consumers will be charged at 3% of GST on the value of gold. This had affected the gold demand in Ludhiana initially, but is likely to benefit the organized trade.

Gold ETFs

• Minimum one can buy is 1 unit which is equivalent to one gram. However, AMCs like Quantum also offer a half a gram option for each unit. Each unit is backed up by physical gold of 99.5 purity.
• These funds invest 90-100% in physical gold and 0-10% in debt instruments. Hence, returns from gold ETF are mostly in line with the prices of physical gold.
• Listed on the stock exchanges. Thus, one needs to have a demat account to start trading
• One can sell their funds anytime during market hours. One can convert gold ETF to physical gold provided it reaches 1 kg. However, this limit varies from AMC to AMC. For e.g. in case of Motilal Oswal’s MOSt Gold shares wherein investors can redeem units for a minimum of 10 grams of gold.

Note: Investors should know the charges associated with Gold MF such as 1% will be charged as expense ratio along with brokerage and demat charges.

Gold Fund

• They are open-ended funds that invest in gold ETF and gold savings funds.
• One can invest through SIP in the Gold ETF; invest a fixed amount per month in gold without having a demat account. The minimum amount through which one can start SIP in Gold fund is Rs 1000.
• Can be sold based on NAV for the day
• Comes with the total expense ratio of  2% of the asset under management

If you are buying physical gold for investment or even for consumption purpose, it is recommended to buy hallmark jewellery. BIS Hallmark certifies that your gold conforms to the national and international standards of fineness and purity. That is, if you have bought, 18K gold jewellery, one can be assured that 75% is gold in your jewellery and rest is other metals. Here are the components, one must check while buying physical gold:

1. BIS Mark
2. Purity in Karat and fineness
   

   Karat	Fineness
   22 Karat	22K916
   18 karat	18K750
   14 karat	14K585

3. Assaying and hallmarking center’s Identification mark/number
4. Jeweller’s Identification mark/number

As it is with any other investment, there are certain things one should know before investing in gold and here they are:

• There is no lock-in period in gold investment except for sovereign gold bonds where it is 8 years with exit option available after 5 years
• The redemption amount varies from physical gold to paper gold. In case of physical gold, it depends on the purity, weight, and fineness of gold. Whereas, in case of paper gold, the market price on the redemption date determines the amount
• Gold is a capital asset, capital gains tax will be imposed at the time of selling except in the case of Sovereign gold bonds if kept for 8 years
• At the time of selling your gold ornaments, making charges and GST paid won’t be recovered

To meet short term credit needs, one can use their gold to avail gold loan. All one needs to do is take the gold one is ready to pledge to the bank. Here are the top 10 banks and NBFCs offering gold loan in India you can refer to.

After evaluating the gold on the basis of net weight, purity, fineness and your repaying capacity, loan amount that can be sanctioned to you will be calculated. The gold you deposit will be kept in their high security vault and the borrower needs to repay the loan through EMIs, paying interest upfront or as stated in the agreement.