Today’s Gold Rate in Mumbai

India isn’t a producer of gold but a consumer. This implies that the country doesn’t mine gold and relies heavily on imports to meet existing gold demand. Across the world, the Gold rate is decided by the London bullion association and IBA publishes the gold prices in US dollars which serves as a benchmark worldwide for bankers and bullion traders.

In India, the Indian Bullion Jewellers Association (IBJA) IBJA takes the international price of the gold as a base and adds import duty and other applicable taxes. Thereafter an organization of bullion sellers decide at which rate the gold will be given to retailers which makes the gold price in Mumbai and across India volatile and subject to change even twice in one day.

Gold rate in Delhi is different than the gold rate in Mumbai and so is the case with other states. Given below are some of the reasons behind gold rate variation across different cities in India:

Transportation/Hauling cost: Physical movement of gold from one place to another requires suitable security arrangement and the cost of this is added to the selling price of gold. Hence, depending on the state, the gold rates vary.

Different Bullion Association: Local state gold association also plays a major role in determining gold price in that particular state.

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With the introduction of the GST in July 2017, VAT of 1.2% (varies with state) and excise duty of 1% has been replaced with 3% GST. The custom duty was set as 10% but in 2019, it was changed to 12.5%. Additional 5% GST will also be imposed on the making charges of the Jewellery.

Gold has become one of the most preferred investment options to diversify their portfolio. Hedge against inflation and high liquidity could be the reasons behind this shift. Here are your options if you want to get started with investment in gold in Mumbai:

1. Gold Accumulation Plan/Digital Gold: Apart from buying physical gold from your local jeweller, you can also buy gold through Paytm, Freecharge (Mobile Wallets) and GoldRush offered by the Stock Holding Corporation of India. It is called Gold Accumulation Plan as they allow you to purchase gold from as low as Rs.1 and you can either redeem in cash or through coins. What’s more, one is not obligated to make any fixed or periodic payments. One can be assured of the safety and security of the accumulated gold as it is offered in association with MMTC-PAMP. One shouldn’t confuse Gold Accumulation Plan with systematic Investment plan as it won’t earn you any interest.
2. Sovereign Gold Bonds: Offered by the government of India and issued by the RBI, it is one way to own gold in paper form. Their value is denominated in grams and one can buy a minimum 1 gram and maximum up to 4 kg for individuals. The tenor of the bond is 8 years with the exit option after the 5th year. However, one should know these bonds are not available all around the year. Instead, the government will intermittently open a window for the fresh sale to investors. Through this investment, you can earn assured interest and at the time of redemption or maturity, you will get the gold value prevailing at that time. Since they are government securities, they are safe to invest in.
3. Gold ETF: Another way to own gold in a paper form, Gold ETFs is an exchange-traded fund which can be bought and sold only on the stock exchange. Thus, saving you the trouble of keeping physical gold. To get started in Gold ETF, one needs to have a demat account and a trading account. Once you have the account ready, choose from the number of Gold ETF available on the platform and place the order from your broker’s trading portal. However, if you are trading through portals like Paisabazaar and ET money, then it is not a prerequisite. The expenses incurred in buying and selling Gold ETF are much lower than the cost incurred in buying, selling and storing physical gold.

There are certain aspects one should know before investing or buying gold in Mumbai and they are:

• If you are investing in Sovereign Gold Bond for meeting a specific goal, make sure that the goal is at least five years away because the tenor of the SGB is 8 years with exit option starting from 5th year
• Purity of gold is denoted in Karats/Carats, with 24 karat gold being 99.9% pure and 22 karat being 92%, 18 Karat being 75% pure and so on. It is advisable to always purchase hallmarked jewellery as it helps you to get better value at the time of selling
• If the piece of jewellery you have bought has studded stone work then make sure you are charged for gold and stone work separately
• Gold prices in Mumbai fluctuate every day due to various factors. Before buying gold, make sure you know the current gold rate in Mumbai
• Make sure your bill mentions important details about the gold jewellery/coin such as Karat, weight, and price per gram.
• Gold coins come in tamper-proof packaging. If you are planning to sell it later, it is recommended not to open the packaging
• If you are purchasing gold jewellery online, make sure you get the hallmark certificate

It is important to check whether the gold you have purchased is pure or not irrespective from the medium (online/offline) you have bought. In India, the Bureau of Indian Standards (BIS) is a government body which certifies the purity of gold and this process is called hallmarking. Hallmarking ensures that the gold used for making jewellery adheres to the international standards of purity.

Following are the components that one needs to look on the hallmarked gold jewellery/ gold coins to ensure you are getting the gold as written on the tag.

For Gold Jewellery

1. BIS Mark
2. Purity in Karat and fineness classified as
   • 958-23 Carat
   • 916-22 Carat
   • 750-18 Carat
   • 585-14 Carat
3. Assaying and Hallmarking Centre’s Identification mark/number
4. Jeweller’s Identification mark/number

For Gold Coins

• BIS Mark
• Karat
• Fineness

Note: Above-mentioned details are engraved on the hallmark of gold From 15 Jan 2021, it will be mandatory for jewellers to sell only hallmarked 14K, 18K, and 22K jewellery

Gold can easily be used as collateral for you to get a loan against jewellery in Mumbai. To get a Gold loan in Mumbai, one needs to approach a bank offering gold loan and based on the purity and weight of the gold coin/jewellery, they will decide the amount of loan that can be sanctioned. In return, the borrower needs to pay the interest on gold. Until the loan amount is paid, the bank will keep the deposited gold in a secured vault.

Q1. What is the best time to buy Gold in Mumbai?

Gold rate in Mumbai fluctuates everyday due to various factors and it is not entirely possible to relate one event for the fall in gold rate in Mumbai. Experts recommend that one should accumulate gold on each dip as this will help them to average out on prices. Currently, gold prices are showing an upward trend due to the global uncertainties.

Q2. Why can’t we make jewellery in 24K gold?

24K gold is too soft to make any jewellery. Hence, jewellers use 22K or 18K gold for jewellery that can withstand daily usage.

Q3. What’s the difference between Hallmark, KDM, and 916 Gold?

• Hallmark: It is the process of certifying purity in gold. BIS is the only agency which is accredited to do that. Hallmark certificate ensures the gold used for making gold jewellery/coin adheres to the international standards of purity.
• KDM: Earlier jewellers used to use Cadmium as a solder to join two metals and this is where KDM gold came into being. However, it is now banned as it is proven to be hazardous to the health of artisans working with it.
• 916 Gold: Gold is categorised based on its purity and 22 carat gold is referred to as 916. If it’s hallmarked then it will be referred to as BIS 916 which means it compromises 91.6 gold in 100 gram.

Q4. Does real gold tarnish?

Gold is resistant to tarnish, rust and even corrosion as it is one of the least reactive metals.