Gold scams by gold dealers?

[Tax with Ria]

I've always witnessed a huge gold rate difference between offline local gold stores and online.

Belonging from Kanpur, here online 22kt gold rate is 57900 per 10 gm, however while you visit the stores offline, they'll tell you 22kt gold rate as 62000 per 10 gm. And when you tell about today's rate ,they argue that sorry this rate is fixed.
And it's not about only 1 shop it's about the whole market. These shop owners or members of union fix the rates of whole city and you've no other option but to buy gold at higher prices then the market.
They'll tell you that they've fixed the gold rate as per their local union policies, often known as "Sarrafaa union".

Recently I've also seen a huge difference in craftsmanship charges. Here in many stores you'll find the making charges ranging from 20%-30% in daily wear jewellery and approx 50% in necklaces and fancy jewellery while in south india, these charges are very low ranging from 12% - 18%.
We don't even know that whether these charges are actually paid to jewellery makers or not.

So we are not only fooled on gold rates but also fooled on craftsmanship charges.

Being gold investor addict, i would rather prefer wasting 16000 ticket + 10000 hotel & other charges and travel to Kerala where 22kt gold rate is 4715, to buy gold at cheaper rate.
But everyone might be thinking like my mom that "नौ की लकड़ी नब्बे खर्च".
But looking on a broader perspective, if you've marriage functions for your own or for your daughter, sister, fiancee, it's a good idea to travel Kerala and buy gold, as there are no baggage restrictions in domestic flights for gold/ silver.
Kerala has the cheapest gold rate due to making charges, demand supply and transportation reasons as it contributes 40% of India's consumption for gold.
And if you calculate on NET SAVINGS, they are huge.

Eg- if you buy gold here in north india. Gold rate being 22kt 5790 per gm. Suppose you've to purchase total of 70gm gold (including necklace, chain, rings) it's cost would be approx 600000.

However if you buy in Kerala the same thing, it would cost around 450000.
Travelling and hotel cost=35000

Net savings= 600000-(450000+35000) = 115000 approx.

And if you've robust connection with friends or family you can ask them to buy gold on your behalf or you can buy them online if buying on small quantities.

So keeping in regard all these, my question still remains the same that are these gold dealers fooling us ?

 

[ShavirB]

Thank you for highlighting this, the point mentioned is REALLY important for all the Gold Enthusiasts. I would just like to add my experience to the above points

Generally, I've noticed that if you purchase Gold Ornaments from a branded chain (Tanishq, Kalyan, etc) the gold rate would more or less be in line with the online rates. But they would usually have very high making charges.

If you're ok getting gold coins instead of gold jewellery from branded chains - you can get a good deal since making charges on these are on the lower side (8-10%). Buying any other form of gold from offline/ local stores seems like a rip off.

 

[Tax with Ria]

Thank you for highlighting this, the point mentioned is REALLY important for all the Gold Enthusiasts. I would just like to add my experience to the above points

Generally, I've noticed that if you purchase Gold Ornaments from a branded chain (Tanishq, Kalyan, etc) the gold rate would more or less be in line with the online rates. But they would usually have very high making charges.

If you're ok getting gold coins instead of gold jewellery from branded chains - you can get a good deal since making charges on these are on the lower side (8-10%). Buying any other form of gold from offline/ local stores seems like a rip off.

Yes, bullion is a very good option for investment if you're purchasing physical gold from local markets as there is negligible making charges.
But on the occassions of marriage's, where we are compelled to buy gold chains, necklaces, rings, bracelets. It's better to buy from jewellery stores who have less making charges even if you've to barter on high gold rates.
Reason behind this is that, there's no buyback value of making charges. So always prefer to buy simple design, more of gold with less making charges in your budget instead of buying fancy gold items as it has more making charges.
Also refrain buying AD, ZIRCON on gold, as you'll pay for it while buying gold but there's 0 buy back value while selling gold.
If you really want diamonds, go for lab grown diamonds. Nowadays there are very inn, as they lower rates and their quality ranges from VVS1 to VVS2 which is far better option from buying diamonds in local store which don't give certification of diamonds.
Also labgrown diamonds have 80% buy back while selling and they're 60 times cheaper than original diamond but providing quality shine as same as real diamonds.
Real diamonds are expensive because supply is always restricted and no local shop owners will want lab grown diamonds to compete as they've lesser profit margins.

So, be very cautious while buying gold.
Some of the cheaper gold shops I've discovered is
1. D.A.R jewellery - Coimbatore
2. Silver Palace - TN
3. Malabar gold &. Diamonds
4. Kalyan jewellers
5. Joyllukas

 

[zacobite]

I've always witnessed a huge gold rate difference between offline local gold stores and online.

Belonging from Kanpur, here online 22kt gold rate is 57900 per 10 gm, however while you visit the stores offline, they'll tell you 22kt gold rate as 62000 per 10 gm. And when you tell about today's rate ,they argue that sorry this rate is fixed.
And it's not about only 1 shop it's about the whole market. These shop owners or members of union fix the rates of whole city and you've no other option but to buy gold at higher prices then the market.
They'll tell you that they've fixed the gold rate as per their local union policies, often known as "Sarrafaa union".

Recently I've also seen a huge difference in craftsmanship charges. Here in many stores you'll find the making charges ranging from 20%-30% in daily wear jewellery and approx 50% in necklaces and fancy jewellery while in south india, these charges are very low ranging from 12% - 18%.
We don't even know that whether these charges are actually paid to jewellery makers or not.

So we are not only fooled on gold rates but also fooled on craftsmanship charges.

Being gold investor addict, i would rather prefer wasting 16000 ticket + 10000 hotel & other charges and travel to Kerala where 22kt gold rate is 4715, to buy gold at cheaper rate.
But everyone might be thinking like my mom that "नौ की लकड़ी नब्बे खर्च".
But looking on a broader perspective, if you've marriage functions for your own or for your daughter, sister, fiancee, it's a good idea to travel Kerala and buy gold, as there are no baggage restrictions in domestic flights for gold/ silver.
Kerala has the cheapest gold rate due to making charges, demand supply and transportation reasons as it contributes 40% of India's consumption for gold.
And if you calculate on NET SAVINGS, they are huge.

Eg- if you buy gold here in north india. Gold rate being 22kt 5790 per gm. Suppose you've to purchase total of 70gm gold (including necklace, chain, rings) it's cost would be approx 600000.

However if you buy in Kerala the same thing, it would cost around 450000.
Travelling and hotel cost=35000

Net savings= 600000-(450000+35000) = 115000 approx.

And if you've robust connection with friends or family you can ask them to buy gold on your behalf or you can buy them online if buying on small quantities.

So keeping in regard all these, my question still remains the same that are these gold dealers fooling us ?

Agree.. buy gold at reputed brands only.. local jewelry is risky in quality and you will never know till you sell / exchange and they melt it..

 

[sangani]

I've always witnessed a huge gold rate difference between offline local gold stores and online.

Belonging from Kanpur, here online 22kt gold rate is 57900 per 10 gm, however while you visit the stores offline, they'll tell you 22kt gold rate as 62000 per 10 gm. And when you tell about today's rate ,they argue that sorry this rate is fixed.
And it's not about only 1 shop it's about the whole market. These shop owners or members of union fix the rates of whole city and you've no other option but to buy gold at higher prices then the market.
They'll tell you that they've fixed the gold rate as per their local union policies, often known as "Sarrafaa union".

Recently I've also seen a huge difference in craftsmanship charges. Here in many stores you'll find the making charges ranging from 20%-30% in daily wear jewellery and approx 50% in necklaces and fancy jewellery while in south india, these charges are very low ranging from 12% - 18%.
We don't even know that whether these charges are actually paid to jewellery makers or not.

So we are not only fooled on gold rates but also fooled on craftsmanship charges.

Being gold investor addict, i would rather prefer wasting 16000 ticket + 10000 hotel & other charges and travel to Kerala where 22kt gold rate is 4715, to buy gold at cheaper rate.
But everyone might be thinking like my mom that "नौ की लकड़ी नब्बे खर्च".
But looking on a broader perspective, if you've marriage functions for your own or for your daughter, sister, fiancee, it's a good idea to travel Kerala and buy gold, as there are no baggage restrictions in domestic flights for gold/ silver.
Kerala has the cheapest gold rate due to making charges, demand supply and transportation reasons as it contributes 40% of India's consumption for gold.
And if you calculate on NET SAVINGS, they are huge.

Eg- if you buy gold here in north india. Gold rate being 22kt 5790 per gm. Suppose you've to purchase total of 70gm gold (including necklace, chain, rings) it's cost would be approx 600000.

However if you buy in Kerala the same thing, it would cost around 450000.
Travelling and hotel cost=35000

Net savings= 600000-(450000+35000) = 115000 approx.

And if you've robust connection with friends or family you can ask them to buy gold on your behalf or you can buy them online if buying on small quantities.

So keeping in regard all these, my question still remains the same that are these gold dealers fooling us ?

It's certainly frustrating to encounter such disparities in gold rates and craftsmanship charges between offline and online gold providers....The practices of local unions like the "Sarrafaa union" can indeed create monopolies, limiting consumer options. Exploring alternatives like buying from Kerala demonstrates a proactive approach to maximizing savings. However, it raises valid questions about the integrity of gold dealers and the fairness of their pricing policies. Hope this help

 

[Sudhaker]

These days almost all Gold Jewellery shops (such as Malabar, etc) have started a monthly payment scheme where you make payment every month for 11 months an the day you make payment the gold price gets locked in for the amount you paid. Upon maturity they give a good discount (up to 18% in case of Malabar and no making at all in case of South India Jewellers just pay for extra gold based on item chosen and GST) while purchasing ornaments. Its like SIP but in gold and at the end you also get discount on making charges. Seems like a win win to me.

 

[luciferocious]

These days almost all Gold Jewellery shops (such as Malabar, etc) have started a monthly payment scheme where you make payment every month for 11 months an the day you make payment the gold price gets locked in for the amount you paid. Upon maturity they give a good discount (up to 18% in case of Malabar and no making at all in case of South India Jewellers just pay for extra gold based on item chosen and GST) while purchasing ornaments. Its like SIP but in gold and at the end you also get discount on making charges. Seems like a win win to me.

can we also take gold coins instead of gold jewelry?

 

[Sudhaker]

can we also take gold coins instead of gold jewelry?

We can but making charges (also called as VA or wastage) are already quite low for gold coins, so I would suggest buy coins directly instead of using monthly instalment scheme, as you would save more if planning to purchase Jewellery in this scheme.

 

[Sudhaker]

Making charges for Gold coins would be around 4-6% depending on the store / seller, where as ornaments have making charge from 14% to 26%.

 

[Tax with Ria]

Making charges for Gold coins would be around 4-6% depending on the store / seller, where as ornaments have making charge from 14% to 26%.

Making charges even reach upto 50% in tanishq and local jewellery stores

 

[Sudhaker]

True, however that is mostly for diamond jewellery and the gold used is also 18K (compared to the cost of 18K Gold, making charges are almost 50%).
For only gold Jewellery the max making I have seen is 26%

 

[sshivam512]

is

Thanx for the knowledge contribution

 

[shivampembarti]

Making charges even reach upto 50% in tanishq and local jewellery stores

A simple question raw gold (pure gold ) biscuit is it legal to buy ? Legal , then 24 k biscuit is not vaild for bank security , for gold loan

 

[Sudhaker]

Yes, you can buy Gold biscuit with 99.99% purity (also known as 24 K), at most of the jewellery shops and its perfectly legal.
Not sure if they can or cannot be used as collateral in getting gold loans.