Gold Rate Today in Bangalore

Bangalore, known as the "Silicon Valley of India," is the largest city in the southern Indian state of Karnataka. It is the leading IT exporter in the country and has one of the highest GDPs of any big city in India. 

Naturally, given the high concentration of wealth and income in the city, there is a high demand for gold in Bangalore, both for investment and decorative purposes. This demand increases during Dhanteras and other festivals where gold is considered auspicious.

The rates of gold in the city are linked to its global prices and other local influences. Factors like the purity of gold, import duties, and festive demand surges have a bearing on gold prices in Bangalore. 

Please continue reading to learn more about gold rates, the top factors affecting its volatility, and the prerequisite concepts for investing in gold.

Alternatives to Physical Gold in Bangalore

Gold is considered a stable investment for long-term returns. It is excellent for diversifying your portfolio and hedging against market risks in Bangalore. You can invest in physical gold, such as jewellery and bullion. 

If you want to avoid paying for charges or wastage, you can choose to invest in digital gold, such as gold bonds, equity-traded funds (ETFs), etc. Here are some of the alternatives to physical gold:

1. Sovereign gold bonds: Various gold bonds are issued from time to time by the Reserve Bank of India. These bonds are denominated in grams of gold. The owner receives an interest payment of 2.5% on a semi-annual basis. At maturity, the bond can be redeemed at the then price of 24-karat gold.
2. Gold ETFs: You can invest in gold ETFs issued by various fund houses. Using these, you can even invest in decimals of gold quantity (such as 0.02 grams). However, these ETFs are 100% backed by physical gold.
3. Gold futures: These are exchange-traded contracts wherein the buyer agrees to get gold delivered by the seller at a future date at a predetermined price.
4. Gold Mutual Funds: These are the funds that invest in various gold-linked instruments. They allow an investor to have the investment professionally managed at minimal cost and calculated risk

Comparison between 24K and 22K Gold

One of the most purchased forms of gold in terms of purity grades is 24K gold and 22k gold. When buying gold for jewellery or investment purposes, deciding whether to get 24K or 22K gold can be puzzling. Let’s compare these two types of gold in detail.

Purity or Fineness Grade

24K gold is the purest form of gold available in the market, with a fineness level of 999. On the contrary, 22K gold is only 91.6% pure gold, and the rest 8.4% is a mixture of other metals like silver, copper, or zinc. The fineness level of 22K gold is 916.

Purpose

Pure gold is soft, making it unsuitable for jewellery making. However, it has wide applications in the manufacturing industry and is widely used in making electronic devices and medical equipment. Other than manufacturing purposes, they are also available as gold bars and coins, as 24K gold is perfect for investment purposes.

Whereas 22K gold is perfect for making jewellery. Since they are mixed with other metals like copper, silver, or zinc, the metal alloy formed is highly durable, which is why they are perfect for making jewellery.

Cost

As the purity level of gold increases, so does the cost. 24K gold is more expensive than 22K gold since the former is pure gold and the latter is gold mixed with impurities (other metals).

From the above comparison, it is clear that if you are looking to buy gold for daily wear purposes, then 22K is the best choice. However, if the purpose of purchase is solely investment, then 24K gold is a better choice. 

Understanding the Gold Purity Nomenclature in Bangalore

The purity of gold can be verified through the hallmark provided by the Bureau of Indian Standards (BIS). If you are looking to buy gold in Bangalore, check the hallmark before buying it. 

All registered jewellers in B’luru are required to stamp gold articles with the hallmark and gold karats. There are very high chances of being defrauded in the purchase of un-hallmarked gold.

The purity of gold is measured in karats. 24-karat gold is the purest form of gold, containing 99.9% gold. However, it isn't easy to make jewellery with it because it is too fragile. 

Generally, 22-karat gold is used to make jewellery. It contains 22 parts gold and two parts copper, silver, nickel, and zinc. It has a purity of 91.6% and is hence also called "916 gold."

14K and 18K gold are used to make designer jewellery which has a lesser quantity of gold.

Consider These Factors While Buying Gold in Bangalore

1. Purity: Ensure that you pay as per the purity of gold in karats. The percentage of gold in the alloy determines its purity.
2. 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.
3. 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.
4. 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.

Taxes on Gold in Bangalore

The following taxes are levied on every morsel of gold sold in the city: 

1. Import duty: An import duty of 12.5% is charged on gold imported into the country, which affects the price in Bangalore.
2. Agriculture infrastructure development cess: 2.5% of AIDC is charged on imported gold.
3. The price of gold in Bangalore includes a GST of 3%.
4. GST on making charges: When physical gold is made into jewellery, it attracts making charges. Gold is subject to various GST rates from the time of import till purchase. Each purchase of gold is subject to a 3% GST, and making charges are subject to a 5% GST. Following the implementation of GST, gold purchases increased by about 0.75%.
5. Hallmarking charges of ₹45/- are charged per article of gold in Bangalore.

Determinants of Gold Prices in Bangalore

Here are some factors that determine the gold price in Bangalore:

1. Since most of the gold demand is met through imports, customs duties impact gold prices in Bangalore.
2. Fluctuations in the Indian rupee also impact the price of imported gold, thereby affecting the price in B’luru.
3. Most of the gold in India is imported by banks. The gold you buy in B’luru contains a margin for the banks. 
4. Bullion dealers charge a margin before you buy the gold articles.
5. The price of imported gold after factoring in currency fluctuations, customs duty, bank's margin and dealers' margin is then adjusted for local taxes in Bangalore.
6. Variations in the rates in Bangalore can be accounted for based on:
   i. Cost of transporting gold
   ii. Security protocols followed by the state
7. Consequently, southern states in India have slightly lower gold prices, as compared to northern states.
8. Gold is considered a haven when market-linked investments become risky. Hence, when the stock market falls, gold prices increase.

The global demand and supply of gold keep fluctuating in response to macroeconomic factors and geopolitical situations. This impacts the local price of gold in Bangalore as well.