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A Brief History of Gold
The history of gold has been dated back to the Egyptians. Gold was a representation of wealth and power. Gold has destroyed nations because of it has always been considered precious quality. For centuries now gold has been the obsession of mankind, regardless of the era.
The history of gold has been dated back to the Egyptians. Gold was a representation of wealth and power. Gold has destroyed nations because of it has always been considered precious quality. For centuries now gold has been the obsession of mankind, regardless of the era.
Archeological evidence suggests gold was first used in the Middle East where the first known civilizations began. On fact, the oldest piece of gold jewelry is Egyptian jewelry that had been found in the tomb of Queen Zer. These gold pieces are the oldest examples found of any type of jewelry from the third millennium BCE. Throughout the Egyptian era, tombs were raided in search of gold and other fine treasures. One however, was left undisturbed, the tomb of Tutankhamen. Inside was the largest collection of gold and jewelry in the world to include a gold coffin that had the intricate detail of Egyptian
craftsmanship and gold working.
craftsmanship and gold working.
Gold Jewellery buying tips for Indians
As a smart buyer, you may keep the following things in mind when you deal with jewellery shops.
First, if you are exchanging gold (selling old ornaments and buying new) make sure that you are getting the full price of what you are selling. i.e. As long as you are selling 22K gold, the shop may not reduce any price but give you the actual market price of the 22K gold by its weight. There are some jewellers who charge melting charges, handling charges or whatever they may call it but never ever fall into that trap
Each and every piece has to be weighed separately and tested for purity using the electronic purity tester while selling. i.e. if you have a pair of ear rings, test them separately
Ask for the current gold price on your purchase day and their standard making charges before commencing your shopping
Check for the BIS hallmark on the inner or back side of each of the pieces you are buying
Ask for the ‘wastage charges’ for each of the pieces that you are picking and be prepared for the negotiation
You may start by asking the ‘BEST wastage charge’ as per the salesman. Negotiate with him and tell him that you are serious about the purchase if he’s forthcoming in terms of a reduced rate. He will mostly give one percent less. Take it to the store manager or supervisor at the next level to get 2-3% negotiation done. You WILL definitely get 2-3% discount if you are making bigger purchases. If you are gone there just to pick a little 2gm earring or so, you better not negotiate much. But if you are on wedding or engagement shopping, you may save a lot by negotiating
Each and every piece has to be weighed separately and tested for purity using the electronic purity tester while selling. i.e. if you have a pair of ear rings, test them separately
Ask for the current gold price on your purchase day and their standard making charges before commencing your shopping
Check for the BIS hallmark on the inner or back side of each of the pieces you are buying
Ask for the ‘wastage charges’ for each of the pieces that you are picking and be prepared for the negotiation
You may start by asking the ‘BEST wastage charge’ as per the salesman. Negotiate with him and tell him that you are serious about the purchase if he’s forthcoming in terms of a reduced rate. He will mostly give one percent less. Take it to the store manager or supervisor at the next level to get 2-3% negotiation done. You WILL definitely get 2-3% discount if you are making bigger purchases. If you are gone there just to pick a little 2gm earring or so, you better not negotiate much. But if you are on wedding or engagement shopping, you may save a lot by negotiating
Making Charges, Gold Wastage charges etc
As I mentioned earlier, there has to be certain metals added to pure gold to make it tough and good enough to make jewellery. This is the first level of added cost to the making process followed by the actual making charges to convert the gold bars or blocks into beautiful jewellery patterns.
The making charges (‘Panikkooli’ for Malayali friends) is the cost of converting raw gold into jewellery. This is usually expressed in Rupees pergram of gold. In most cases, the making charges per gram of gold vary from 25 to 35 rupees. Compared to the price of gold today, this is a negligible number.
However, there is another scary number called the ‘wastage charges’ (‘Panikkuravu’ as Keralites call it). In the good old times, the goldsmiths used to make gold jewellery by melting gold, cutting and shaping it into tiny pieces and join them together to make great handmade gold jewellery. In this process they ‘claimed’ that certain quantity of gold go wasted though these goldsmiths are actually smart enough to collect or retrieve most of the gold without wasting any. Nowadays, the gold ornaments are made in advanced machines and nothing really go wasted. However, this tradition of calculating ‘wastage’ continues and this is expressed in terms of ‘percentage’and they charge that to the customers.
The amount charged to the customers for the ‘wastage’ caused is known as the ‘wastage charges’. It’s quite ridiculous that there’s no norm for this wastage charge component and that’s exactly where your jeweller cheats you. The wastage charges typically vary from 10% to 18% in most shops while it’s quite possible to have it as high as 20% or 24% or even as low as 8%. Unfortunately, nobody knows why certain ornaments has to have more wastage than some others as claimed by the jeweller.
What is gold carat
When people buy gold jewelry in the store, the seller often describes it in terms of karats (abbreviated kt or K). The gold jewelries are made with different karat, such as 10 karat, 12 karat, 14 karat, and 18 karat. High karat gold jewelries are more expensive. Well, what exactly does the "karat" mean?
When people buy gold jewelry in the store, the seller often describes it in terms of karats (abbreviated kt or K). The gold jewelries are made with different karat, such as 10 karat, 12 karat, 14 karat, and 18 karat. High karat gold jewelries are more expensive. Well, what exactly does the "karat" mean?
What is the karat?
Karat is a unit of purity for gold alloys, rather than weight. The word "karat" is from the carob seed, which was used as balance scales to measure the weight of gold in ancient Asian bazaars.
What is Gold Karat?
Since the pure gold is too soft to make exquisite jewelries. Therefore, the gold jewelries are almost alloy which are mixed with other metals, such as silver, copper, or zinc. Pure gold is 24 karats. A unit karat of gold is equal to 1/24 part (4.1667%). The gold karat shows how many parts of gold and how many parts of other metals in a gold jewelry. The following chart shows the differences between the different karats, and also shows the percentage of gold and other metals.
Karats gold percentage Other Metal percentage
24kt gold 100.00% other metal 0.000%
22kt gold 91.60% other metal 8.4%
18kt gold 75.00% other metal 25%
14kt gold 58.5% other metal 41.500%
10kt gold 41.7% other metal 58.300%
6kt gold 25% other metal 75%
As I mentioned, gold is a relatively soft metal, so high-karat stuff are often easily damaged. A 24 karat item is generally reserved for display or ceremonial use. In the stores, most gold items have a karat rating in the range 9 to 18. In the US, the minimum karat value for gold jewelry to be sold is 10, but in the UK 9 karat is more common. In additional, gold purity does not affect its weight! Different color of gold are mixed with different other metals. For example, gold mixes copper is called red karat gold.
What's the difference between Karat and Carat?
We are often confusion over the differing use of "carat" and "karat". The Karat is a gold unit for purity, and Carat is a unit for mass which is used for measuring the weight of gemstones and pearls (1 carat is equal to 200mg). However, carat and karat are usually used interchangeably in some countries.
How to test the purity of gold?
There are two common methods to test gold for its purity, Acid Test Kits and Electronic Testing Kits. However, any acid testing will lose some small amount of gold.
Important Points To Keep In Mind While Purchasing Gold Jewellery
Look For :-
Jewellery Showroom selling BIS Hallmark Jewellery.
Look For :-
Jewellery Showroom selling BIS Hallmark Jewellery.
Buy:- Hallmark Jewellery only. It assures the mark of purity/fitness.
Ask For: - Cash Memo /Invoice which will help BIS to resolve complaints (if any).
Gold pricing formula/Purchasing Tips
purchasing gold jewellery is:
Actual cost of gold as per the day’s rate + Wastage charges + Making Charges + VAT if any. In addition, if your jewellery has any precious stones, that cost will be added up as well.
Cost of Gold Jewellery = Making Charges + Wastage Charges + Cost of Stones, if any + VAT
For example, assume that the gold rate is at Rs.2500/- per gram for 22 Karat gold. When you buy a 10 gram gold chain with the making charges at 35 rupees per gram and wastage charges at 12%, the following will be the calculation to arrive at the final price:
(1) Cost of gold alone = 10 * 2500 = 25,000/-
(2) Making charges = 10 * 35 = 350/-
(3) Wastage charges = 12 * 25,000 / 100 = 3,000/-
The total cost before VAT = 28,350/-
If the VAT is at 1% that becomes 28,633.50/-
Recently the jewellers have started representing the Wastage Charges and Making charges together as VA or ‘Value Addition’.
