Here is a checklist when you go shopping for gold this Diwali

Gold prices are not uniform across the country and understanding these local variations is crucial for buyers to avoid overpaying. Factors such as transportation costs, local taxes and demand influence prices.

“The most reliable way to know the prevailing rate in your city is to check credible sources like the India Bullion and Jewellers Association (IBJA), which publishes benchmark rates, or financial platforms that update city-wise prices daily," Ankur Daga, founder and CEO of Angara, said.

Check prices in the morning and evening to snag the best deal, as the prices are updated twice every day.

Verify purity and hallmarking

In a market flooded with options, confirming the gold's purity safeguards against fakes. Purity is measured in karats, with 24K being the purest, though jewellery often ranges from 14K to 22K for durability.

Although gold hallmarking is mandatory, buyers should always verify the unique Hallmark Identification (HUID) number on their jewellery before purchasing. While the hallmark is intended to guarantee gold purity, errors or unscrupulous practices can still occur.

"The most important check for purity today is the Bureau of Indian Standards (BIS) hallmark, which has become the standard in India. A 22-karat piece, for instance, will carry a “916” stamp, meaning the gold is 91.6 percent pure," Daga said.

When you look closely, there is six-digit alphanumeric code. Daga said the BIS Care mobile app allows you to enter this code, instantly verifying the jeweller’s registration, the hallmarking centre, article type, hallmarking date and purity.

Know additional charges and final costs

Beyond the base gold rate, various fees can inflate the bill.

"The biggest variable is the making charge, which covers labour, craftsmanship and the small but inevitable loss of gold during production,” Daga said. This can vary widely, depending on the design — a simple, machine-made gold chain may carry a 5–8 percent making charge, while an intricate, hand-crafted piece can go as high as 20–30 percent.

Atul Shinghal, founder and CEO, Scripbox said, “Shaping it into custom designs leads to a wastage of gold. Jewellers include this amount as wastage charges in the total cost of your jewelry.” For gemstone-studded pieces, separate billing for stones prevents overcharge.

Daga recommends asking for a clear breakup before buying the gold jewellery.

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Scam alert

As Diwali approaches, buyers must be wary of scams, which intensify during the festive rush. With fake hallmarks and hidden fees posing significant risks, vigilance is key to a safe purchase.

Daga warns against buying non-hallmarked jewellery, as the purity might not match the promise. Hidden making charges that are not disclosed upfront are another concern, as is inflates pricing of gemstones in studded pieces. Buy from trusted jewellers, verify the hallmark and always take an invoice.

Buy-back policy

When selling gold, the jeweller will deduct making charges from the gold's value, calculating the buyback amount based on current rates, not the purchase date. Understanding the buyback policy beforehand is crucial, advises Shinghal.

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Scheme for buying gold

Jewellers offer gold schemes that allow you to buy ornaments in easy instalments. “These schemes enable you to plan your purchase better, with benefits like discounts on making charges, waived instalments, or custom designs,” Shinghal said.

Planning for resale and long-term value

Gold's enduring appeal lies in its resale potential but factors like documentation and policies affect returns.

"The resale value of jewellery is determined primarily by the net gold content and the prevailing market rate. At the time of buy-back, most jewellers will test the purity using a karatometer, which is why having proper certification and documentation makes the process smoother," Daga said.

Shinghal said, "When buying an ornament, thoroughly check its weight and calculate the cost as per gold cost on the day of purchase. If you buy a piece with precious stones like diamond-studded on it, then you must take extra care."