Today’s Gold Rate in Pune

India relies heavily on imports to meet existing gold demand. Gold rate is decided by the London bullion association and IBA publishes the gold prices in US dollars twice in a day. This serves as a benchmark 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. Later, an organization of bullion sellers decides at which rate the gold will be given to retailers which makes the gold price today in Pune and across India volatile.

With the introduction of the GST in July 2017, consumers need to pay 3% GST which will be charged on the total value of gold.

There are a number of factors which directly or indirectly lead to gold rate fluctuation in Pune or even in India. Some of the factors have been listed below:

Interest Rates: Gold rate in Pune and Interest rates share a negative correlation. When interest rates increase, fixed income investments become more attractive to investors as it generates fixed return unlike gold which doesn’t carry any such return.

US dollar-rupee equation: Gold prices are set in dollars and due to this, gold and dollar share an inverse relationship. If the rupee weakens against the dollar, gold prices will likely appreciate in rupee terms. However, remember the change in rupee-dollar rates has no impact on gold rates denominated in dollars.

Inflation: The value of our currency usually depreciates whenever inflation index increases. During that time, the demand for gold increases as gold is considered a tool to hedge against inflationary conditions.

Geo political and economic crises: Gold is seen as a safe haven asset. During political and economic uncertainty, investors start to park their funds in gold which pushes up the demand for gold.

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

• Storage cost of keeping gold and transportation charges are high in case of gold which adds up to the cost of gold.
• Local gold association also plays a major role in determining gold price in Pune or in any particular city or state

The cost of jewellery depends on various factors from making charges to the type of metal being used in the making. Although there is no universal formula to calculate the cost, below formula is generally used to calculate the final price of your 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)

Note: If your jewellery is studded with precious stones, check the total weight of the gold jewellery minus the weight of the stones embedded in the jewellery.

Gold as an investment has become one of the most preferred investment options to diversify your portfolio as it acts as a tool to hedge you against inflation. Following  are the investment options one can choose to invest in Pune:

Gold coins/ Bars: If you are just getting started with investment, gold coins or bars can be your best bet. Available in 5/10/15/20/50 grams etc., one can buy gold coins/bars either through online or from a jeweller. All gold coins sold in India are certified as per the Bureau of Indian Standards (BIS) Hallmark. It is suggested to buy 24KT with 99.9% purity and do check the buyback terms from the jeweller you are buying from.

Gold Accumulation Plan (Digital Gold): If keeping physical gold is an issue, you can invest in gold through gold accumulation plan offered by Paytm, FreechargeGold Rush, etc. These wallets allow you to purchase gold from as low as Rs. 1. What’s more, one is not obligated to make any fixed or periodic payments.

Sovereign Gold Bonds: Offered by the government of India and issued by the RBI, it is one way to own gold in paper form. An individual can buy minimum 1 gram gold and maximum up to 4 kg. The tenor of the bond is 8 years with the exit option available after five years. However, one should know these bonds  are not available all around the year but are notified by the government. 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.

Investors should know certain aspects about investing in gold in Pune and here are they:

• Gold coins usually come in tamper-proof packaging. It is suggested not to open or temper the packaging.
• If you are purchasing gold jewellery online, make sure you get a hallmark certificate as it gives you an official recording of total gold in your gold jewellery
• It is important to know the value of gold per gram before buying gold
• Check buy-back terms from the jewellery if you want to exchange it latter

It is always advisable to buy hallmarked gold jewellery to ensure purity of the gold you have bought. Bureau of Indian Standards (BIS) is the governing body which certifies the purity of the gold and ensures that the gold used for making jewellery adheres to the international standards of purity. Following are the components, as per the website of BIS, that one needs to look on their gold jewellery to know whether it is hallmarked or not

For Gold Jewellery,

1.   BIS Mark
2.   Purity in Karat and fineness classified a
   • 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: From 15 Jan 2021, it will be mandatory for jewellers to sell only 14 carat, 18 carat, 22 carat hallmarked jewellery.

One can use their gold jewellery as collateral to get loan against gold jewellery in Pune. Many banks and small finance institutions offer gold loans in Pune. One needs to approach the financial institution with their gold jewellery and the loan amount will be sanctioned based on the purity, weight of the gold, tenor of the loan amount, etc. The borrower needs to pay the interest annually or semi-annually depending on the loan amount and tenor. Until the loan amount is repaid, the bank will keep the deposited gold in a vault.