All that glitters may not be pure gold
IANS[ THURSDAY, JANUARY 02, 2003 12:31:31 AM ]
NEW DELHI: Keen to swap her grandmother's gold necklace for a
more trendy design for her daughter's wedding trousseau, homemaker
Shikha Kohli was shocked to discover the prized family heirloom was
not 22kt gold but a lower 16kt.
The largest consumers of the precious yellow metal, Indians
traditionally favour 22kt gold as it carries more value than 18kt
jewellery in vogue in the West.
Many like Shikha have over the years been short changed by
goldsmiths and even reputed jewellers about the purity of gold bought
for their wedding trousseau or on other important occasions. A study
by the Bureau of Indian Standards (BIS) revealed that only 14
samples out of 120 drawn from jewellers in eight cities were of the
declared value. "Today, an increasing number of people are asking for
hallmarked gold to ensure that they get the quality of gold they are
paying for and not 18kt instead of 22kt" Vicky Bansal of Bansal Son
Jewellers, a leading retailer here, said. Since introducing the concept
of hallmarked gold in April 2000, the BIS has granted licences to 500
jewellers.
With only 11 hallmarking centres in India, including three in New Delhi
and two in Mumbai, jewellers in several metros and large cities are
waiting for more centres to be made operational, said Sneh Bhatla,
director of the central marks department of BIS. "The cost of setting
up a hallmarking centres being around Rs 6-7m, the number of
centres is inadequate to meet the rising demand for hallmarked gold,"
said Bhatla. Over the last two-and-a-half years, some jewellers have
been forced to surrender their licences due to lack of proper certifying
facilities in their cities, said Bhatla. The BIS has set a high standard
to ensure that customers get their money's worth when investing in
gold jewellery. "As we are keen to join the International Convention on
Control and Marking of Precious Metals, known as the Vienna
Convention of 1972, the hallmarking scheme has been aligned with their
standards. Which means a minimum of 91.6% purity is required for 22kt
gold, and even 91.5% purity is to be rejected," said Bhatla.
Only 11 countries, mostly in Europe, are currently members of the
Vienna Convention, which carries an annual fee of $6,000. All the
members are allowed to put a common quality control mark of
traditional double pan weighing scale. "Being a member of Vienna
Convention would enable Indian exporters to indirectly gain better
acceptance, as their products would not have to be tested further at
the destination market," said Bhatla. Gems and jewellery are high in
the basket of commodities India exports. From $7.5bn worth last
year, India is targeting exports of $8.6bn in the fiscal ending March
31.
At the completion of three years of hallmarking practice in April, '03 India
plans to apply for Vienna Convention membership. BIS is still to
discuss with the government whether a share of the Vienna
Convention annual fees are to be passed on to the hallmarking
centres and the exporters or whether the cost is to be borne from the
Rs 40,000 fee charged from the centres for three years' licence and a
10% royalty on every piece hallmarked.
END QUOTE:
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COMMENTARY:
This 10% royalty on every piece should INDIA be granted Vienna Convention acceptance--as they are
most resolutely planning to achieve---
....
comes at the "end of the India wedding season"...traditionally time for late winter strength in PoG,
PLUS...
comes atop an already increased PoG currently being experienced.
I fully expect UBS.bulliondesk to be reporting India's import resistance to higher gold prices around this
April/May time frame. One can be assured the Hindu jeweler will NOT be absorbing the 10% royalty
cost, but instead passing it along to his/her retail consumer.
gold & platinum_tutor |
