Gold Scam ALERT⚠️ What Jewellers Don’t Want You to Know | ETF Investment | Gold-Silver Rate

Unlock the Value of Gold: Understand Pricing and Purity Before You Invest!

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Gold Scam

Introduction:

Gold Scam ALERT: If you’ve ever bought gold from a local jeweller, you might believe you’re getting a fair deal by checking prices on platforms like Money Control. However, there’s more to gold pricing than meets the eye, and jewellers often take advantage of customers’ lack of knowledge. In this post, we’ll uncover the real story behind gold pricing and how you can avoid being scammed legally.

The Truth Behind Gold Pricing:

I recently made a call to my jeweller to check the price of 24-carat gold for 10 grams. While Money Control was showing a rate of ₹77,750 per 10 grams (as of Saturday, when global markets were closed), my jeweller quoted me ₹80,000 per 10 grams. That’s a significant difference, even when considering GST!

So, was my jeweller trying to cheat me? Let’s break down how gold pricing works, and you’ll see how this “legal” scam operates.

Step-by-Step Breakdown of Gold Price Calculation:

  1. Gold Price on Official Websites: Websites like Money Control or MCX show the closing rates of gold, often based on international markets. The price may vary slightly due to supply-demand factors or market closure timings.
  2. GST Confusion: You might think that adding 3% GST to the Money Control rate will give you the final price. But that’s not how it works. For example:
  • Money Control rate: ₹77,750 (per 10 grams)
  • Adding 3% GST: ₹80,000 (approx.) This seems correct, but here’s where things get tricky!
  1. Jewellers’ Profit from GST: While you think the GST is a government tax, many jewellers charge GST on top of their own hidden costs. This can add an extra 1-3% to the final price, which they pocket.

How Purity Affects Pricing:

Gold is measured in carats, and its purity determines its price. Here’s a simplified guide:

  • 24-Carat Gold: 99.99% pure (used in bars and coins).
  • 22-Carat Gold: 91.6% pure (most common in jewellery).
  • 18-Carat Gold: 75% pure (used in diamond jewellery).
  • 14-Carat Gold: 58.3% pure (cheaper options like rings).

However, jewellers often use a higher benchmark for pricing. For example, 22-carat gold, which should be priced based on 91.6% purity, is often charged at 92%, adding to their profits.

Why Lower Carat Gold is Costly:

When buying 14 or 18-carat gold, you might think you’re saving money by buying less pure gold. But jewellers charge you as if it’s purer than it is! For instance:

  • 18-Carat Gold: Purity is 74.99%, but you’re charged for 76% purity.
  • 14-Carat Gold: Purity is 58.32%, but you’re charged for 60%.

These small percentage differences might not seem like much, but over time, they add up to significant extra costs for customers.

How to Calculate the Real Gold Price:

Gold prices are influenced by international values, which are measured in troy ounces (not regular ounces). Here’s the formula to calculate the real price:

  1. Check International Price: The price is usually in USD per troy ounce. For example, $2,272.41 per ounce.
  2. Convert to Grams: 1 troy ounce = 31.1035 grams. So divide the price by this number to get the price per gram.
  3. Convert to INR: Multiply the price by the current USD-INR exchange rate.
  4. Add Import Duty: India charges 6% import duty on gold (reduced from 15%).
  5. Add GST and other taxes: GST is 3%, plus any additional cess or charges.

When you do all these calculations, the price you get is often close to what jewellers charge, but they still mark up the price for their benefit.

The Role of Demand and Supply:

Gold prices can fluctuate due to supply and demand. Even after calculating everything, jewellers may add ₹200-₹400 per gram based on current market conditions. If demand is high, prices will increase, and vice versa.

How to Avoid Being Scammed:

Gold Scam ALERT
  1. Always Ask for a Bill: When you buy gold, ask for a proper GST-included bill. This ensures transparency.
  2. Understand the Carat System: Know the purity of the gold you are buying and ensure the pricing matches the purity.
  3. Check the Hallmark: Ensure the gold is hallmarked and certified for its purity. For 22-carat gold, the hallmark should read “916”, indicating 91.6% purity.
  4. Be Wary of Lower Carat Jewellery: While it may seem cheaper, 14 or 18-carat gold may cost more in the long run due to hidden charges.

Final Thoughts:

Jewellers often exploit the complexity of gold pricing to charge customers more. By understanding how the price of gold is calculated and being aware of hidden costs, you can avoid falling victim to these legal scams. Next time you buy gold, do your research, ask questions, and make sure you’re paying for the actual value of the gold you’re getting!


By learning the right way to buy gold, you can make informed decisions and save yourself from paying more than necessary. Let us know in the comments how this information will change the way you purchase gold in the future!

Also Read: How to Earn Money Online with GroMo without Investment | Earning Money App | No Investment Business

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