Gold prices on Akshaya Tritiya: Planning to buy gold? Here are things to remember

For many, the auspicious occasion of Akshaya Tritiya holds great significance to start something new in their life, be it personal or any other new initiative. Purchasing gold on Akshaya Tritiya is believed to bring prosperity, good fortune and is seen as a way to receive the blessings of Goddess Lakshmi.

Furthermore, gold has proven to be a safe haven with increasing returns over the years. Therefore, for any investment goal, it is always advisable to purchase gold of the highest karat purity and positive weight tolerance from authorised sellers. Thus, purest gold offers more value and consumers and investors must consider some salient factors before investing.

Understanding the karat

There are varieties of pure gold in the market but at different karats. Furthermore, 24 karat gold is not the purest form of gold. Depending on the usage from a minted gold coin or bar or for jewellery, 24 karat gold will undergo some refinement.

For instance, some minted gold coins or bars at 24K can be at over 99.99 per cent (999.9+) purity level, which is the purest form of gold available, while other gold products in the same karat range available in the market come at 99.9 per cent or 99.5 per cent purity and so on, with the remaining part being balance metal. There are lower karat gold available too such as, 18K gold indicates 75 pre cent gold.

The highest karat available for gold jewellery is 22K, with variations in purity as gold needs balance metal such as silver or copper to retain structure and strength. Consumers must also be mindful of losing 10-25 per cent of the value due to the making charges.

Additionally, some sellers offer over 99.99 per cent pure gold products (24K) made with the finest Swiss craftsmanship, enhancing the investment value. Higher karat gold with the highest purity fetches higher value, reflecting its rarity and pristine beauty. Hence, it is always advisable to get the highest possible purity level at 24 karats when buying gold.

Investment value

For those seeking long-term value from their gold purchase, choosing the highest karat, purest gold is the best option, making it suitable for diversifying portfolios or hedging against any reduced economic opportunities.

For any purchasing reasons – social, cultural, or tradition – gold’s timeless appeal and purity make it a reliable store of value, weathering economic and political headwinds. Its inherent beauty adds an emotional dimension, intertwined with cultural significance, for a sense of satisfaction beyond mere monetary gain. However, for minted products such as bars and coins, it is advisable to choose the highest purity with a positive weight tolerance, which means, purchasing a minted gold product weighing more than the stated weight on the packaging.

The fineness point

Fineness measures the parts per thousand of pure gold present. The highest quality is denoted as 999.9+ indicating over 99.99 per cent purest gold content. A fineness of 999 means 99.9 per cent purity, while 916 signifies 91.6 per cent gold. Purchasing gold with the highest possible fineness of 999.9+ not only maximizes returns per unit weight but also ensures longevity and higher resale value down the line.

Additionally, it authenticates the investment grade of your gold. Higher fineness minimizes the risk of purchasing counterfeit or impure gold that contains excessive balance metals diluting its worth. It allows easier verification and bolsters confidence in the tangible value of the gold.

When investing in gold, purity is paramount. The purer the gold, the greater its value and potential return on investment. While the karat system provides a basic measure of gold content, the fineness level offers a more precise analysis.

Reputable sellers prioritise offering 999.9+ purity gold with minimum balance metal. Some even add pure silver as the balance which further bolsters the investment. These sellers will provide certifications attesting to the authenticity and fineness of the gold. Investors should always request these and buy from trustworthy suppliers with stringent quality controls.

Global accreditation

Another aspect to consider is some sellers promote their London Bullion Market Association (LBMA) accreditation, which is the globally recognised hallmark of purity standards. LBMA’s “Good Delivery” standards cover specifications like purity levels, weight, physical characteristics and more. Products bearing this accreditation enable traceability and acceptance across international gold markets and institutions like gold ETFs.

Responsible sourcing is another crucial factor indicating that investment-grade gold was obtained through legitimate supply chains and sources. LBMA-mandated audits verify global ethics and environmental compliance for responsibly sourced gold.

In essence, higher fineness equates to higher quality gold that holds maximum value. By understanding purity nuances and sourcing from credible suppliers, investors can make informed decisions to ensure their gold portfolio shines brightest. A keen eye for purity is key to unlocking gold’s full wealth potential.

Weight tolerance

This is a crucial analysis during your gold (and even for silver) purchase. Positive weight tolerance is a minted gold product weighing more than the stated weight imprinted on the product and its packaging. Minted products that come with a positive weight tolerance give more value to an investment.

For further assurance, this can be determined with an Assayer-certified minted card. Gold products purchased from an accredited company, always come with a unique number along with this minted card.

Another aspect to consider is that some minted gold products come with +/- 50mg stamped on them. Investors need to be mindful of this stamp, as the weight tolerance of the gold product with it, can affect the true value of the gold purchase. Therefore, precious metal products must only be bought from accredited entities to make sure one receives full value for money.

The author is Managing Director and CEO of MMTC-PAMP