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How to Determine the Value of Gold Coins?
Gold has long been the most coveted precious metal on earth. If you talk about India, gold has a lot of cultural and religious significance. It is considered auspicious to buy and gift gold on special occasions like marriage and festivals. That being said, gold has a very high market value in the country with people buying different forms such as gold jewellery and gold coins.
Besides, gold is also a popular choice of investment, especially in the form of gold coins and bars. This is because they are available in different denominations starting from as low as 0.5 grams. If you are planning to buy gold coins in the coming festive season, here are a few important points related to their evaluation. Carefully analysing these factors will help you to determine the gold coin rate in the market, be it the selling price of old Indian coins or buying a new gold coin.
Important Factors For Determining Gold Coin Value
The purity of gold is measured in terms of Carat and Fineness with Carat being the more commonly used term. 24 carat is the purest form of gold which contains 24/24 parts of the metal. Next to it is 22 carat that contains 22 parts of gold and 2 parts of other metals such as silver and zinc. While there are other options like 18 carats and 14 carats, people generally prefer the purest forms, which are 24 carats and 22 carats to ensure getting better returns. Purest the gold coin, highest the rate and vice-versa.
Fineness, on the other hand, is defined as the weight of precious gold. For instance, 24-carat gold will have the fineness of 999.9 parts per thousand of purity.
Gold coins are available to buy in different denominations, ranging from 0.5 grams to 50 grams in weight. However, the most popular gold coins preferred for gifting include 1 gram, 2 grams, 5 grams, 8 grams and 10 grams. For those buying gold coins for investment, the weight ranges up to 50 grams, depending on the budget.
When interested, you can easily check 1 gram, 2 grams, 5 grams or 8 grams gold coin price online and even buy it by making a secure online payment with financial institutions like Muthoot Finance. They further provide gold coins in various designs for you to choose from.
Hallmark is directly related to the purity of the gold coin. Besides, buying a BIS Hallmark gold coin will ensure getting good returns whenever you plan to sell, especially when treated as an investment.
The Government of India has set up the Bureau of Indian Standards (BIS) to ensure that consumers are not cheated while buying gold. Effective from January 1, 2017, there are the following components of a BIS hallmark of gold jewellery, coins and other forms that one should be aware of to stay away from fraud.
1. BIS Logo
2. Purity of the gold item, in Carat or Fineness
3. Logo of the hallmarking centre
4. Jewellery identification mark and number
The grade of a gold coin is akin to its value. People sometimes hire professional graders to examine the condition of old gold coins, especially when interested in knowing the selling price of old Indian gold coins.
The grading of gold coins is determined by a number that is assigned during the process of examination. This number can range anywhere from 1 to 70, depending on the condition of the coin. The higher number of the grading range determines a higher gold coin rate in the market and vice versa. For instance, a 1 g gold coin price with higher grading will be better than a 5g gold coin price with a lower grade.
- Ease of selling
Ease of selling is an important factor when you buy gold coins for investment purposes and you would surely expect appraised returns in future. While purity, grade and hallmark play a key role in ease of selling, especially in the case of old gold coins, there are other factors like finding the right buyer.
If you have bought or are planning to buy gold coins from the bank, it may be noted that they will not buy back those coins as per the Reserve Bank of India (RBI) directive. Hence, always prefer jewellers or financial institutions that offer buyback, to stay rest assured.
- Making Charges
Making charges is highly responsible for inflating the overall price of both gold jewellery and coins. However, these charges are for the intricacy of the jewellery and hence low in the case of gold coins. Further, it may be noted that making charges are not included in the returns at the time of selling. For instance, the 1 gram gold coin rate at the time purchase was INR 5000 inclusive of a 10% making charge. Its price, at the time of selling, will be based on the then price of gold minus 10% making charge.
Keeping all these points in mind, it is important to ensure that you buy gold coins with little to no making charges. As a tip, you can look for schemes when there are discounts on making charges to be able to save on the extra cost and ensure maximum value.
We hope this information helps you to understand how the value of gold coins is determined. To play safe, you can opt for trusted financial institutions like Muthoot Finance. With them, you can buy 24 carat gold coin online with no additional charges or carrying cost and minimal making charges, making it a suitable option.