If you are planning to buy a gold coin to offer goddess Lakshmi on Diwali, try outlets of MMTC or your neighbourhood jeweller branded retail firms rather than organised banks or the post office. You will pay 9.5-12.5 per cent less. Or save Rs 1,500-2,000 on a 24-carat 8-gram gold coin.
The reason why the same quality coin is priced higher in a bank is because of costs, bankers say. These include making charges, import duty, customs duty, cost of packaging, assay certification and transportation.
The high costs don’t end here. “When you buy a coin from a bank you get a brand and there is a premium for it,” said a senior bank official of one of India’s largest banks who did not wish to be named. In other words, you pay for the brand.
While banks offer certification of purity at a significant premium, financial experts say that it makes sense to buy it from a trusted retailer who can offer the same purity.
“The premium is lost immediately after the purchase and when sold it gives only the value of gold at the time of sale,” said Surya Bhatia, a Delhi-based financial planner. “Thus, gold price will have to move at least to those levels for you to break even.”
“We do not charge high premium from the customers and our price is the right price,” said a senior official at MMTC who did not wish to be named. “This is a reason for the good demand we have seen this Diwali even at high gold prices.”
While experts are surprised at the surge in the price of gold that is currently near its all-time high, they feel Diwali buying is just sentiment driven.
“I am surprised at the high rise in gold prices,” said Jamal Mecklai, CEO, Mecklai Financial Services, a currency and gold expert. “At Diwali, you just go out and buy it.”
“The demand has been good this year even as the prices are high,” said Ajay Mitra, managing director, World Gold Council. “While banks are charging a premium for Swiss coin, it is up to consumers whether they want to buy a Swiss coin (that banks sell) or a domestic coin (made in India).”
Coin-making charges and assay certification costs in Switzerland are higher than in India, which takes the price of an imported gold coin higher.