Proposed Hallmarking Program Could Boost Confidence for Indians Buying Gold
Late last month, the gold trading industry in India announced plans to set up 100 hallmarking centers, and establish a precious metal assay and training institute in an effort to ensure the purity of gold sold in the country.
According to the Economic Times of India, “Indian Association of Hallmarking Centres has submitted a proposal to the Bureau of Indian Standards to issue a certificate along with each jewelry sold, capturing its photo, purity, weight and the names of the center that put the hallmark and the jeweler who sold it.”
Gold hallmarks show the purity of a piece of gold jewelry. They generally include the mark of the assaying office that certified the purity, as well as the fineness or caratage of the gold.
‘Caratage’ is the measurement of purity of gold alloyed with other metals. Pure gold is certified as 24 carat. The lower the number the less gold the metal contains. For example, 18 carat gold contains 75% gold and 25% other metals.
The minimum caratage necessary for a metal to be considered gold varies. In the US, 10 carat is the legal minimum, with 14 karat being the most popular in jewelry. In France, the UK, Austria, Portugal and Ireland, 9 karat is the lowest caratage permitted to be called gold. In Denmark and Greece, the legal minimum standard is set at 8 karat.
According to the World Gold Council, hallmarking jewelry was Europe’s earliest form of consumer protection. The practice dates back to King Louis IX of France and Edward I of England in the 1200s.
In 1327, King Edward III of England granted a charter to the ‘Worshipful Company of Goldsmiths,’ headquartered in London at Goldsmiths’ Hall. The English term ‘hallmark’ originates with this hall and its official marks.”
All gold jewelry sold in England heavier than one ounce must be hallmarked by one of four assay offices in London. Standards are loser in the US. Caratage may be identified by independent signage close to the piece of jewellery or simply offered verbally. It does not have to be marked on the piece itself. If an item is marked, it must also have a trademark stamp in close proximity to identify its origin.
Standardized hallmarking will serve to increase confidence when buying gold in India. The country ranks as the world’s second largest gold market. Gold is a central part of the Indian economy. Indians traditionally buy and hold gold. The yellow metal is interwoven into the country’s marriage ceremonies and cultural rites. Indians also value gold as a store of wealth, especially in poor rural regions. Indians demonstrated their hunger for gold last April during the celebration of Akshay Tritiya, an important Hindu holiday. They bought some 23 tons of gold in a single day.
The proposed hallmarking system will increase transparency, foster confidence, and likely help support demand.
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