When you think about buying gold coins – the first place that comes to your mind is probably the local jeweler, but there are a lot more options than that at your disposal, if you want to buy gold coins.
In this post I am going to look at some of those options.
1. Buy gold coins at the bank: A lot of Indian banks sell gold coins these days. The benefit of buying gold coins from a reputed bank is that you have a lot more peace of mind, as far as the quality of the gold coins go. The disadvantage of buying gold from a bank is that they normally charge a premium on the gold coins, and you might be paying extra than what you would have otherwise paid at a jeweler. Another disadvantage is that normally banks don’t buy back gold from you. If you buy gold from a reputed jeweler, then in most cases they will buy it back from you.
2. Buy gold coins at the post office: This might come as a surprise to some of you, and it certainly surprised me, but it is true that the Indian Post Office sells gold coins. They too charge a premium on the gold coins they sell, but it seems that it is less than that charged by the bank. I am not sure about this though, and it is best to check this point yourself. Like banks, the Post Office will not buy the gold back from you, and only a few post offices are allowed to sell gold coins, so this option might not even be practical for you.
3. Buy gold coins online: I saw at least a couple of websites that were selling gold coins online, and that seemed to be legitimate. I am not linking to them because I couldn’t read any reviews on them, and do not know any one who has bought gold coins online in India. Further, when I checked the price of a 2 gram gold coin on their website and compared it with the gold coins SBI is selling, – I found that the online store is charging a higher price. The online store was asking Rs. 3998 for a 2 gram 99% purity gold coin, whereas the price I saw at SBI was Rs. 3,760. This doesn’t make much sense to me, and personally, I would rather go to a bank and buy gold coins, rather than pay extra to an online retailer to buy gold coins.
4. Buy gold coins from nation wide retailers like Tanishq: You can go to a reputed nation-wide jeweler like Tanishq, and can buy gold coins or bars from them. This offers you peace of mind because they have a strong reputation, and their good distributions means that this will be a convenient option for many of you.
5. Buy gold coins from your local jeweler: Most Indians will have a family jeweler, and if they sell gold coins or bars, then you might just find that this is the cheapest option. Furthermore, they will be willing to buy – back the gold coins as well, so that is an added benefit of buying from them.
These were five options that I could think of where you could buy gold coins in India, and I’d like to hear if there are any options that you know of and I missed out on.
u can buy gold coins online at good online discounts too through icici bank website. they offer variants too and then collect it from icici bank branch
Hey thanks mena, will go and check out the bank site.. wanted to purchase a coin
i have some gold plate of 24k -99.95%.
with vat + testing crtificate.
1gm———28 pic
2gm———– pic—23
5gm————-32 pic
can i sale to any one other than jeweler ?
do i need any license to do this?
if i am not a jeweler.
Very informative post. The post office option surprised me also. I will check prices in my city and post comparisons. Yes ETF vs Physical Gold is a good debate. May be you should post an article on the pros and cons of each. If I were to choose based on emotional sentiments then I would go for Physical gold. But what are the specific benifits of ETFs, the flexibility to trade anytime.?
Currently, the big benefit is the ease with which you can buy and sell since the problem with buying physical gold is that you have to pay a heavy premium when you buy it and then it’s not easy to sell it without having to incur some sort of deductions. If you can find a jeweler that buys and sells gold bars or coins without charging any premium or cutting anything while buying it back the that’s a good option.
Hi
I heard that there are some restrictions placed by govt on purchasing gold bullion like on purchase of certain amount the govt is reported about the transaction. Can any one confirm? This is the way to keep tab on purchasers by govt to confiscate I think. Also the increased import duty to 2% of value so as to discourage gold imports. Did any one purchase gold recently and are aware of any restrictions. Thanks.
I also very much pleased on this article and it’ll be helpful for me. Thanx alot
That’s great to hear Sujata!
ETF suck, in an economic crisis like what we are going through currently, the banks controlling the ETF can crash. Where’s your ‘etf blip’ in that case??
Banks don’t control ETF. Goldbees which is the biggest gold ETF in India is owned by Goldman Sachs, so in that sense you could say that their parent is a large US bank, but that doesn’t mean it’s controlled by them.
But if your base case is that banks are going to collapse worldwide and there is going to be massive chaos in the financial system then there is no point in buying anything but physical gold.
I’ve never possessed physical gold in my life other than that in my mother’s & wife ‘s sparse jewelry, but as I cross 50 years of age I yearn to own it in its most base form…the gold bar . Never had the nerve to buy one however as my age has made me particularly wary of being cheated
Perhaps its a primal instinct!
This from someone who was reasonably successful in the stock market (Transactions which include Gold ETFs)
Onset of mental degeneration ?
Personally – I think possession is 90% of the law.
I have gold – I can hold it in my hand – it is mine
You sir have an ETF – I my opinion you have piece of paper at best. Hahaha!
*At best* I have something that’s as good as gold; *at worst* it’s an electronic blip in a screen & not even a piece of paper. Semantics, semantics 🙂
Throughout the history, the Governments of each country have been printing money and your hard earned money is losing its purchasing value everyday as there are more and more money in the circulation every day.
This loss of value of the money is called inflation and the only way to protect your money from inflation is investing in the real money that is gold and silver. If the inflation goes up, the prices of gold and silver also go up so if you invest in precious metals you don’t need to worry about inflation.
Buying Gold coins is not the best way to invest in Gold. But it is definitely a better investment than buying jewelry.
Personally I invest in Gold based ETFs such as GoldBees and SPDR Gold (GLD). These are paper investments where you invest your money in gold and silver without physically owning them. The expenses are very low of investing in Etfs and you get almost the same return as investing in physical gold
Wt about gold coin of 99.50…….??
Gitansh, what you are offering is illegal !
Venkat – thanks for pointing this comment and bringing it to my attention. I will delete it.
Hi Ahmed !
From all the above info I observed that buying from either Banks or Post office is not worth rather we should ahead with buying it form jewellers if it is physical gold
Please add to my info what exactly is Glod ETF ?
How we can purchase one and what are the minimum units that one should buy ?
what are the other charges other than their market rate as on the date of purchase ?
Where to access more info on the same ?
If we want to convert the same in physical Gold then how to go for that e.g if we wish to get the same for jewelry making ?
Alka – gold ETFs are electronic products like shares which then hold gold. You can’t convert them to gold ever. You will have to buy and sell them on the stock exchange and that’s what they are – mutual fund type things that own gold and whose price moves in the same way as gold.
Hi Manshu,
That is not true anymore. I bumped across a recent (1 month old) news piece, that now you can take physical delivery, if the EFT value goes above 8 gms. Earlier it was 1 kg. Couldn’t get the news article reference.
However, i find this article from hdfc, gives a gist on Gold ETF, except the physcial delivery part.
http://www.hdfcsec.com/data/docs/education/Sampatti_Gold_ETF_simplified.pdf
Rgds,
Venkat
No Venkat I don’t think that’s possible. Who will give you the units for gold?
The ETFs that sell on the stock exchange are secondary units that people like you and I trade. The fund creates units for a kilo and then they are traded on the exchange by someone like you and me so unless you have that many units you can’t go to the fund and redeem it.
8 grams is pittance when it comes to exchanging it for gold, and because of expenses 1 unit will never actually represent 1 whole gram – it will always be a bit lower. I think you need to recheck your sources.
That link you sent is not very helpful as far as understanding the creation and redemption mechanism of ETFs is concerned which is what we are talking about right now.
Hi,
Never buy from banks you will end up paying much higher than market rates..Jewelers if trust one then can go ahead but again will end up paying more anyways less than banks ..
Try Here i feel its the best place to buy physical gold (always good to have it on hand than paper)
Bangalore Refinery http://www.bangalorerefinery.com ,”Bangalore Refinery today is acclaimed for refining nearly 95% of the total gold mined in India”
They update daily gold prices daily..
Hi All,
Can anyone please advise, the bst place to buy gold from faridabad ?
If you want to buy Gold coins/bars in Bangalore, suggest going to Shubh jewelers – they get gold from Rajesh exports (leading gold and jewelery exporters in India).
Shubh doesn’t charge any extra amount other than 1%tax…no making charges etc. Also, their buy back policy is pretty good as well…on every gram of 24 carat gold..they deduct INR 51 on that day’s rate. I have tried it and its great!
Sorry to say that their claim of “no making charge” is false. If you compare with prevailing gold rate of the Bangalore market, they charge high, generally their rate for 22 K is approximately equal to that of 24 K rate of market. By this they are charging about 10% more than shown in advertisements. Please check again and write your feedback.
thanks for info can you tell me manshu from where I can buy cheapest gold coins and where can I again sell it . I m new to this market.
Can anyone tell which is the best place 2 buy gold in Bangalore.
Banks are trusted source for buying gold coins. By doing a bit of analysis we can save lot of money. We should compare rates among several banks and choose the bank that sells coins at better price.
For example today (Sep 6th 2011), 10 grams of gold at Andhra bank cost 30,321.00 but where as HDFC Bank sells at 34,001.00. The difference is close to 700 Rs. This site http://www.coziie.com/gold-coin-rates provides a nice comparison report.
Hi, my parents bought some gold coins from SBI 2 years back, they were not aware about the fact that SBI won’t buy back the coins. They bought it as an investment for my younger sister. Since banks won’t buy back now what can they do with it if they want to get a return on it? Why are banks selling these coins if they don’t buy it back?
You can take it to a jeweler and sell it there or get them to make jewelery. That’s about the only thing you can do with it. You will have to inquire at a few jewelers to see who gives you the best rate and least deduction. Banks not buying back their gold has become a huge headache as a lot of people are in the same boat as your parents.
informe me periodically
of what?
Manshu,
Thanks a lot for a very informative thread. I’ve a very basic question.
I own a bit of physical gold. If the gold does reach (say) twice its price today or more, where will I go and sell it? Will even the jewellers buy it back at that price? If there’s any other place to sell it, I’d love to know.
Thanks again.