All about hallmarking of gold and why it matters

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Standards are the norm everywhere.

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Without standards, the buyer would have no idea about the purity, quality or concentration, making it so difficult to buy, sell or transact anything for its true value.

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Consider for a moment a world without any standards. Say you visit the jewellery store and buy 10gms of gold.

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Without hallmarking, you would not be sure of the gold purity. You could end up buying gold with just 75% purity for the price of 91.6% purity – a huge rip-off.

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The contamination risk is what makes standards important in every scenario. Standards assume high significance while investing in precious and expensive assets like gold.

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That’s why in India, gold is categorised into distinct standards based on purity, popularly referred to as hallmarking of gold. Let’s understand all about hallmarking of gold and how it works.

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What makes gold so valuable

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Gold’s popularity as an investment option is largely due to its high value, as reflected in the high gold prices.

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The high gold prices are attributable to the high gold demand which exceeds its supply in India.

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A BIS report mentions that in recent years, the annual demand for gold has swelled to 600 - 800 tonnes.

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Given the elevated gold prices, it’s paramount that as a customer, you get the right quantity and pure quality of gold that you actually pay for. 

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As per Melorra, our nation has over 4.5 lakh goldsmiths and 1 lakh jewellers, the sheer scale of which mandates a Government-prescribed legally valid, official standard to ascertain, test and certify the gold purity as an absolute assurance to customers.

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Besides consumer protection, hallmarking also enables RBI to track gold items available and in circulation within the nation. 

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Stand out with standards

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Since gold is a soft metal, it needs to be mixed with other cheaper alloys in order to be used for jewellery-making purposes.

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The alloying factor makes gold jewellery exposed to adulteration risk.

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Adulteration in gold can only be detected by technical tests, leaving the customer vulnerable to possible cheating by certain unethical gold sellers.  These circumstances led to the introduction of mandatory hallmarking standards by the Govt of India and quality control of gold jewellery. 

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The hallmark on gold jewellery will be reflected as 22K916, 18K750, 14K585 etc., which means the following:

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24KT gold which contains 99.99% of pure gold is the purest form of gold. 

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What is hallmarking

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Bureau of Indian Standards (BIS) defines hallmarking as ‘’the accurate determination and official recording of the proportionate content of precious metal in the jewellery/artefacts or bullion/coins.’’

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The procedure of hallmarking in India is controlled, overseen and conducted by the BIS to maintain legal standards of gold purity. BIS’s symbols on gold include the following as depicted in the diagram below:

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Hallmarking on gold items is completed after a laser engraving is done to label the jewellery post assaying as a mark of approval of its purity.

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Understanding what the hallmarking symbols mean

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Upon completion of the testing, a unique six-digit alphanumerical code is generated from the BIS server for each jewellery piece and is laser marked by the authorized hallmarking centre on the jewellery along with the BIS logo and purity mark, as below:

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1. BIS Standard Logo: A triangle-shaped mark that confirms that the gold purity has been verified in a BIS licenced lab. This sign is commonly visible on every hallmarked gold item.

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       2. Purity Mark: This sign certifies the quantity of gold purity in an item by way of:
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• Caratage indicated by Karat (KT or K) i.e. 22K, 18K etc
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• Fineness metric: This quantifies the gold purity in parts per thousand i.e. the pure gold constituent in comparison to the whole gold alloy. 
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For example, a gold object of 22karat purity would have a fineness of 916 (91.6%) and would be marked as 22K916.  
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3. Six-digit alphanumeric code: The Hallmark Unique Identification (HUID) number is embossed in the gold product and is distinct for each and every jewellery piece. Customers can verify this code on the BIS Care App to verify the jewellery code and confirm the purity level. Currently, it is not mandatory to mention the six-digit HUID code on the bill.
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Recent development: BIS has notified recently that going forward jewellers in India are permitted to sell only hallmarked gold jewellery, irrespective of its purity or caratage.

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What’s included within the ambit of hallmarking: Gold hallmarking was allowed for six caratage levels: 14KT, 18KT, 20KT, 22KT, 23KT and 24KT. Since Jan 2021, all jewellery needs to be hallmarked, with certain exceptions.

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• Caratage: Hallmarking covers 14, 18 and 22 carats gold jewellery from June 2021. 
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• Extension: The Indian Standard on Gold Hallmarking IS 1417:2016 has been expanded to include 20 carats, 23 carats and 24 carats. 
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• Bullion: Towards hallmarking of gold bullion and coins made up of fineness 995 and 999 parts per thousand, every refinery or mint needs to obtain a license and apply the hallmark symbol during the manufacturing process. As of Dec 2021, 44 refineries have obtained gold refining licenses from BIS.
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Exceptions to the hallmarking requirement: The jeweller needs to mention a description of such jewellery as well the non-hallmarked aspect in the invoice.

• Gold articles with a weight of less than 2 gms such as finger rings
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• Gold objects meant for export and re-import are exempt
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• Gold article meant to be deployed for industrial, medical or scientific purposes
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• Gold thread
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• Incomplete manufactured item
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• Jewellery falling into categories like Kundan, Polki or jadaau 
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• Jewellers earning an annual turnover of up to INR 40 lakhs per annum
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• Gold watches or fountain pens
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Advantages of hallmarking
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The hallmarking process of accurately determining the exact per cent of gold content would ensure the gold article is not fake, imitation jewellery.

As the saying goes ‘God is in the details’, the gold prices vary according to the fineness of quality or purity level of gold.

Most jewellery is made of 22 KT or 18KT gold, while digital gold sold via Jar App and Sovereign gold bonds issued by RBI are made up of gold standard 24KT gold. Thus, its important to read the fine print first.
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• Realise higher value: The higher the caratage and the purity, the higher the quoted gold prices. Thus, each gm of 24KT gold is more expensive in comparison to 22 KT or 18KT gold, owing to the higher gold component in %.
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• Avoid KDM: Hallmarking also ensures that an ornament is not KDM jewellery, where cadmium, a gold alloy is used for soldering purposes. Incidentally, BIS has banned KDM gold owing to its health hazards.
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• Transparency: Hallmarking of gold enhances the credibility factor and also reinforces customer confidence to buy gold. 
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• Convenience: Selling or recycling of hallmarking gold is convenient and prompt. Since the purity is guaranteed, the customer can directly sell the gold item at the prevailing market price, without any hassles of purity testing or gold melting.
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Pure gold, nothing else
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Digital gold offered on the Jar App is the highest purity gold category i.e. certified 24KT gold which contains 99.99% of pure gold. The best part is, that the 24KT hallmarked digital gold sold via the Jar App channelises the small change on routine transactions towards fractional gold ownership. This way investors can easily invest in digital gold without breaking the bank. A win-win scenario for every gold investor. 
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