Shalini Goel, a housewife, rushed to sell her old jewelry and small pieces of yellow metal in Delhi’s jewelry market as prices for gold soared last year, confident of getting a decent price.
But the jeweler offered less than what she had paid for them. The reason? The jewelry she bought was “not all gold, it lacked in purity,” the dealer said.
The adulteration of gold isn’t new in India but a recent statement by India’s leading precious metals refiner that most of the scrap gold it receives does not meet the necessary levels of purity has prompted fresh warnings to consumers.
“The average gold content present in scrap gold that we receive for refining has varied from 80% to 85%,” Rajesh Khosla, managing director of MMTC-PAMP, the country’s only accredited gold and silver refinery, told The Wall Street Journal in an interview Monday.
India is the world’s largest consumer of gold, the metal is a common gift during festivals, religious events and weddings. But purchasing jewelry for special occasions and keeping it as a safe investment option could be useless, if it lacks purity.
Gold purity is measured in carats or K with 24K being the purest. But gold in its purest form is rarely used to make jewelry especially intricate designs because of its softness and needs to be mixed with other metals like silver, copper or zinc. To ensure that mixing of metals in gold is done within set limits, it has to undergo the purity test at hallmarking centers operated by the Bureau of Indian Standards the accredited government agency that provides hallmarking.
Jewelers are supposed to get the gold they want to sell tested through these BIS laboratories to obtain a certification of purity or fineness in gold articles and a hallmark stamp in accordance with certain international specifications.
They must send the standards agency samples of the gold. BIS inspectors then visit the retailer and, if the assessment is satisfactory, grant the jeweler a license verifying the purity of the articles.
There are currently more than 300 BIS-authorized hallmarking centers and 13,000 licensed jewelers across India, dealing in gold jewelry, according to BIS.
Under current BIS rules, if sellers misuse the permit they could lose their jeweler’s license, face a fine or both.
The problem is, hallmarking is not mandatory in India, which results in a large number of jewelers selling gold that is not certified.
“There have been instances of even top jewelers selling gold that is not really pure to avoid tax and make a quick buck,” BIS spokeswoman Renuka Salwan told The Wall Street Journal.
Besides, some sellers even mislead customers by saying that hallmarking involves huge costs. “In reality, obtaining the certification may mean you pay a little extra, but it’s worth the cost since it ensures purity,” Ms. Salwan said.
To get a piece of gold hallmarked costs 25 rupees (40 cents) per article.
She said people are becoming increasingly aware of the impurity and malpractices in the unorganized industry and shifting to organized players “to get better quality and newer designs.”
In order to curb the menace of impure gold, BIS is currently working to issue a unique identification number for each hallmarked piece of jewelry so that consumers can trace details of the item in case they are unsure of its quality, BIS director-general D.K. Nayyar said.
“This will stop hallmarking of substandard jewelry,” he said.
Here’s a ready reckoner for buying gold:
- BIS Standard Mark: A triangular stamp of the Bureau of Indian Standards
- Purity Grade: The number shows how pure the gold is. This ranges from 8 carat denoted by 333 to 24 carat (pure gold) denoted by 999.
- Hallmarking Center Logo: This is used to check where the jewelry has been evaluated and hallmarked. A list of the centers and logos can be checked here.
- Year of Marking: This is denoted by a code alphabet decided by BIS. [letter 'A' denotes year 2000,'B' for 2001]
- Jeweler Identification Mark: Most jewelers have their own identification mark of BIS certification.
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