Buying gold or silver in India has its own vocabulary: rates per 10 grams, 999 and 916 purity, BIS hallmarks with a HUID code, 3% GST and making charges that sit on top of the metal value. This glossary explains each term in plain English, with Indian examples and the rules that apply here.
It is written for first-time buyers of coins and bars and for anyone comparing jewellers and online dealers who wants to know what sits behind a price. Each entry links to live INR data, so you can go from the definition to the numbers. When you are ready, see the lowest delivered prices for gold coins in India.
All terms
B
- Bid-Ask Spread
- The bid-ask spread is the gap between what a jeweller or dealer charges you for gold or silver (ask) and what it will pay you to buy the same piece back (bid). In India it includes the making charges and GST you paid, so it is the cost of buying and selling even if the rate does not move.
- Bullion
- Bullion is precious metal in a standard, high-purity form, such as bars or coins, bought and sold for its metal content rather than its design or rarity. Its price follows the gold or silver rate plus a premium.
C
- Carat or Karat (Gold Purity)
- A carat (K, also spelt karat) measures gold purity in 24ths: 24 carat is pure gold, 22 carat is 22 parts gold in 24 (91.6%), and 18 carat is 75%. It is not the same as the carat used to weigh diamonds.
F
- Fineness
- Fineness is the share of pure gold or silver in a coin, bar or piece of jewellery, written in parts per thousand. In India the common marks are 999 and 995 for 24 karat bullion and 916 for 22 karat gold.
G
- GST on Gold and Silver in India
- In India, gold and silver bars, coins and jewellery are taxed at 3% GST: 1.5% central GST plus 1.5% state GST. Unlike Canada or the UK, India has no GST exemption for high-purity investment gold, so a 24 karat coin and a 22 karat chain carry the same rate.
L
- LBMA Good Delivery
- LBMA Good Delivery is the London Bullion Market Association's standard for the 400 oz gold bars and 1,000 oz silver bars that banks trade in London. A refiner on its Good Delivery List has passed audits of its bars, finances and sourcing; one Indian refinery is on the gold list.
N
- Numismatic Coins
- A numismatic coin is one that collectors value for its scarcity, condition, finish or history, so it can cost far more than the gold or silver it contains. Proof and limited issues and old collectible coins are numismatic; a common 24K coin with a religious design usually is not.
P
- Premium Over Spot
- The premium over spot is how much more you pay for a gold or silver coin or bar than the metal in it is worth at the day's rate, usually given in percent. In India it is made up of making charges, 3% GST and the seller's margin.
S
- Spot Price
- The spot price is what one troy ounce of gold or silver costs right now in the wholesale market, quoted in US dollars. Indian buyers see it converted into rupees per gram or per 10 grams, and many follow the daily IBJA rate as the domestic benchmark.
T
- Troy Ounce
- A troy ounce is the unit used to price precious metals on world markets and equals 31.1035 grams. In India gold is sold and quoted by the gram or per 10 grams, so the troy ounce matters mainly when you compare Indian rates with the international price.
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