Last updated on: 3th Feb 2023 10:00 AM
Farrukhabad is a culturally rich city in Northern India, flourishing in sugar, potato, and sunflower production. Gold is commonly bought in Farrukhabad as a hedge against unforeseen situations, financial emergencies, and inflation - particularly by those engaged in the agricultural business.
In this blog, we will discuss the gold rates and trends in Farrukhabad and answer some of the frequently asked questions about gold in Farrukhabad to help you make better decisions before investing in gold.
Here are some interesting facts about gold in Farrukhabad:
Farrukhabad is also one of the cities famous for zardozi. Originally from Persia, zardozi embroidery is a popular form of embroidery in India.
Delicate embroidery is done with golden thread, which is a gold alloy. Melted ingots are forced through perforated steel sheets to form a fine wire, which is then flattened by hammering.
A single ounce of gold may be pulled into a 50-mile-long wire thanks to the metal’s malleability.
Approximately half of all gold produced today is used to make jewellery, which remains the single most important use for gold.
Since the California Gold Rush, more than 90% of the world's gold has been extracted.
Until 1912, Olympic gold medals were made of pure gold. Currently, they must include at least 6 grams of gold and at least 92% silver.
The melting point of gold is 1,947ºF (1,064°)C.
Farrukhabad, like any other city, provides a variety of gold investment prospects and modes apart from regular physical gold. The most popular alternatives are:
Gold Exchange-Traded Funds: Gold ETFs track the domestic gold price via an exchange-traded fund (ETF). The instruments invest in gold bullion and are passive investments based on gold prices. Essentially, gold ETFs are units that represent physical gold, either in paper form or dematerialized.
Digital gold: Available to buy online, one can begin investing in digital gold by investing in tiny sums of money and storing gold in an insured locker. If you need physical gold, you may have it delivered to your house in the form of coins or gold bars.
Gold mutual funds: These are mutual funds that are managed by various asset management companies (AMCs) and predominantly invest in gold ETFs. Gold funds are known as mutual funds that invest directly or indirectly in gold reserves. Investments are typically made in the stocks of mining companies, physical gold, and syndicates that produce and distribute gold.
Sovereign Gold Bonds (SGBs): The Reserve Bank of India (RBI) issues these bonds regularly and are available for purchase through leading public and private sector institutions. While returns are related to the price of gold and guaranteed by the GOI, physical gold is not an underlying asset.
Karat (K) is a reference to the purity of gold. Carat (Ct) is a weight measurement that is commonly used when measuring gemstones such as diamonds rather than gold.
Gold is graded on a scale of 0 to 24, with higher karat values signifying higher purity. For identity and authenticity, jewellers generally stamp gold jewellery with the karat grade. Other numbers of karats used to represent gold purity include 10, 14, and 18.
Even though 24-karat gold is 99.9% pure, it is too fragile to be formed into jewellery. In comparison, 22-karat gold has a purity of 91.6% and is perfect for the fabrication of jewellery.
If you want to buy gold jewellery in Farrukhabad, 22-karat gold is a great option. However, if you want to invest in pure gold, you should purchase 24-karat.
In Farrukhabad, just like the rest of the country, purchasing Gold jewellery is subject to a 3% GST on the value of gold. 5% GST is levied on making charges for gold jewellery, coins, biscuits, etc. However, if you sell your old gold jewellery and buy new jewellery simultaneously, you won't have to pay tax.
Prior to the implementation of 3% GST on gold, the effective tax rate on the value of gold was 2% (1% VAT + 1% service tax), so GST implementation on gold has only marginally increased the price of gold for gold buyers.
Since the value of gold is dynamic and might seem expensive at first, with the added GST acting as a factor, people still prefer to invest in gold compared to other options.
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The IBJA (The Indian Bullion Jewellers Association) plays a vital role in determining the daily gold rates in Farrukhabad. IBJA consists of the country's most prominent gold dealers. They account for the lion’s share of gold that is sold and bought in the country and hence, has the power to determine the gold price across the country.
Banks are the largest importers of gold in the country. However, they add a fee to the imported gold before selling it to a supplier, increasing the purchase price at the source. By the time it reaches you, the price you pay for gold includes various charges. For instance, when you buy gold jewellery, you may also need to pay a making price.
Both gold and fixed deposits are popular investment instruments. However, both share some differences, too. To begin with, returns from FD are guaranteed and fixed. Market fluctuations or economic conditions don’t affect your interest income.
On the other hand, gold rates can fluctuate. This is because gold rates get decided daily. They could go up or down based on economic conditions. But per historical trends, gold rates have always gone up in the longer term.
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Gold is valuable only when it is pure. There are instances where customers are duped with impure gold. Hence, confirming the purity of gold is crucial.
The Bureau of Indian Standards (BIS) is a government authority that certifies the purity of gold. According to BIS, the following factors are to be kept in mind when buying gold.
Jewellery hallmarked by BIS will have a BIS logo on it. Remember that since BIS is the only authorized laboratory in India for gold certification.
Karat is a scale to gauge gold's purity. While 24 karat gold is the purest, it is too soft for use. Hence, other metals are added and the gold available in the market is often 22 Karat.
The gold you buy should also carry an identification mark by an authorized jeweller. This helps ensure the gold is from a credible source. The mark can also be helpful in the case of disputes.
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