18K Gold Rate Today in Bangalore

Bangalore is the capital of the Indian state of Karnataka. It is named India's IT hub and a tourist gem. The city also has a considerable demand for gold. Gold is considered one of the safest forms of investment. However, given the volatile market, gold rates also frequently change in today’s times.

How is the Gold Rate determined in Bangalore?

The demand for gold is met by importing gold. The following factors will determine the gold rate: 

• Currency Fluctuations: Gold is traded in the U.S. Dollar internationally. The rupee-dollar conversion will impact the prices.
• Rate of Custom Duty:  The customs duty is levied on all imports. Presently 18.45% is charged on the import of gold. The rate of duty is hiked to regulate demand. 
• Gold Reserves by Reserve Bank of India: The Reserve Bank of India holds gold reserves. When the Reserve Bank of India begins to buy more quantities of gold it will increase the cash flow and decrease the supply of gold. This causes gold rates to increase in the domestic market.
• Crude Oil Prices: The crude oil prices and the rates of gold have a positive correlation. Gold and crude oil are indicators of inflation. In many cases when the prices of crude oil increase. 
• Geopolitical Factors:  Gold retains its value through financial and geopolitical uncertainties. Hence the demand for gold increases during geopolitical chaos. 

Factors affecting gold rates in Bangalore

Gold rates are not stable and are subject to certain changes daily. Understanding the factors behind these changes can help you make better investment decisions. Some of the factors affecting gold rates in Bengaluru are:

Demand and Supply

Demand and supply are among the biggest factors in deciding the rates for any commodity sold in the market, and gold is no exception. The availability of gold is finite across the globe, which limits the supply. However, the demand for the commodity has been increasing as the years go by. This increasing demand results in rising rates of gold.

Import Costs

A lot of physical gold used in India is imported. Therefore, the cost of importing metal can directly impact gold rates in Bengaluru. This means if the import costs increase, the rate of gold will also increase.

Seasonal Demand

Gold is in heavy demand during the times of festivals and weddings. The demand for gold rises substantially during these times, and a hike in gold rates can also be noticed. 

Mining and Production Costs

Gold is acquired through the process of mining. This mined gold is then sent through a production process to get them in usable form. All these processes require energy to complete the task. Therefore, if the mining or production cost increases, the rates of gold will also increase.

Strength of the U.S. Dollar

Gold rates follow an inverse relationship with the dollar price as the dollar weakens and gold rates increase. 

Government Reserves

Government Banks often store gold in bulk to maintain economic stability. The rates hike when they buy gold in large quantities than they sell. Moreover, during inflation, to stabilise the economy, they start to sell gold in the market, which decreases the gold rates. Therefore, government reserves can affect the gold rates in Bengaluru.

What to consider while buying gold in Bangalore?

The following points should be kept in mind while buying gold in Bangalore.
Purity: Ensure that you pay as per the purity of gold in karats. The percentage of gold in the alloy determines its purity.
Making charges: If you buy gold in the form of jewellery, you will be charged making charges that might go up to 35% of the gold. These charges are a complete waste if your purpose is to invest.
Cost of stones in gold jewellery: Gold jewellery often contains different stones; the weight of the stone is also charged at the rate of gold.
Do not buy un-hallmarked gold: Hallmarking is done on gold articles to ensure credibility on the purity of gold. Therefore, it is advised to buy only hallmarked gold.

Taxation on Gold Rates in Bangalore

Import duty: A 12.5% import duty is charged on gold imported into India. This duty is passed on to the consumer, increasing the price of gold in Bangalore.
Agriculture Infrastructure Development Cess (AIDC): A 2.5% AIDC is charged on imported gold. This cess is used to fund infrastructure projects in the agricultural sector.
Goods and Services Tax (GST): A 3% GST is charged on the sale of gold in Bangalore. This tax is used to fund a variety of government programs.
Making charges: When physical gold is made into jewellery, it attracts making charges. These charges are subject to a 5% GST.
Hallmarking charges: A hallmarking charge of ₹45/- is charged per article of gold in Bangalore. This charge is used to ensure the quality of gold jewellery.

How is Gold Purity checked in Bangalore?

Gold purity is measured in karats, with higher karats indicating a higher purity. The following karats of gold are available:

• 24K gold is the purest form, containing 99.9% gold and small amounts of other metals. It is soft and is easily damaged, so it is not used to manufacture jewellery.
• 22K gold is 91.67% gold and 8.33% other metals. It is still considered a high-quality material and is often used for wedding jewellery.
• 18K gold is 75% gold and 25% other metals. It is durable and practical for everyday wear and is often used for intricate jewelry designs.

Here are a few methods to evaluate the purity of gold

• One standard method is the touchstone test, which involves rubbing a small sample of the gold against a touchstone and comparing the colour of the mark left behind to a chart of known gold alloys.
• Another method used to evaluate the purity of gold is the acid test, which involves applying a small drop of acid to a sample of gold. The reaction of the acid with the gold can indicate the purity of the gold.
• To ensure the purity of gold, it is best to purchase gold from reputable jewellers or dealers who certify its purity. It is essential to purchase gold from reputable sources to ensure the purity of the gold.