Industry pleads for hallmarking 9-carat gold to boost demand

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Alarmed by the ballooning of gold prices that has taken the precious metal beyond the reach of numerous pockets, representatives of the gold trade has reasoned with the Bureau of Indian Standards (BIS) to initiate hallmarking of 9-carat gold. The sole objective of this step is to ensure that the metal comes back within the reach of a large section of the customers who cannot hope to buy it as the price of 10 grams of the metal has inched close to the Rs 75,000 mark.

The price of 9-carat gold is far lower than the 22-carat variety. It is now priced at Rs 27,740 per 10 gm. GST of 3% will be applicable over this price.

The price of the yellow metal has caught everyone by surprise by climbing about 17% in the past 5 months. According to industry veterans, the dramatic price rise has depressed pan-India demand by about 20% driving away regular buyers.

If hallmarking is introduced for 9-carat gold, consumers will find it far more affordable than the 22-carat variety.

The Economic Times has reported that industry representatives have urged the BIS to introduce Hallmarking Unique Identification (HUID) numbers for the 9-carat variety too.

According to the current practice, 14, 18 and 22 carat gold are hallmarked with an HUID number.

Over the past several months both gold and silver have scaled record peaks regularly. Gold was traded at Rs 74,222 per 10 gm on May 21. According to prices in Mumbai’s Zaveri Bazaar on May 21, silver touched Rs 92,444 per kg, recording a leap of 5.67% compared to May 17.

Both gold and silver attract 3% GST which pushed the price even higher for the customer.

Office bearers of India Bullion & Jewellers Association, the apex trade body, parleyed with BIS officials to impress upon them the need for hallmarking and HUID numbers the 9-carat gold.

“Prices are sur- ging northwards and consumers are feeling the pinch of it. Keeping that in mind, we met the officials today to allow hallmarking for 9 carat jewellery,” Surendra Mehta, national secretary of IBJA told the newspaper.

IBJA gold rates are authoritative since they are admitted by the Reserve Bank of India to determine the price of sovereign gold bonds.

“In recent weeks, silver has seen strong bullish momentum, driven by growing anticipation of a rate cut in September. Furthermore, following a period of consolidation in industrial metals, there has been a notable uptrend in recent times as global manufacturing activity has improved. This has also contributed to the upward movement of silver prices… Long-term, we believe silver has the potential to cross the ₹110,000 per kg level,” remarked Head of Commodity & Currency, HDFC Securities, Anuj Gupta.

The rally in gold prices began in March 2024 due to geopolitical tensions, possibility of interest rate cut by the US Federal Reserve and sudden jump in Chinese demand. “Despite the higher gold price, we believe there is room for further upside, with prices expected to hit Rs 80,000-85,000 per 10 gm by Akshaya Tritiya next year,” added Gupta.