Gold Rate in Chennai

Chennai is a metropolitan city and the capital of the South Indian state of Tamil Nadu. Chennai is one of the biggest consumers of gold in India as gold in Chennai is one of the hugely imported commodities. Since gold is looked at as a lucrative investment option and also has prominent cultural value, Chennai ranks above all the other cities and states of India when it comes to gold trading. Therefore, the city witnesses major sell and purchase of the yellow metal on a daily basis.

There are numerous jewellery establishments in Chennai that mainly deal in the selling of gold jewellery as people are highly involved in investing in gold ornaments. No matter what the gold rate today in Chennai is, the citizens of the city love gold and purchase it at any given rate. It is important to note that the gold rate in Chennai changes on a daily basis depending on numerous factors such as the demand and supply equation, inflation, the rate of the US dollar and others.

Gold rate in Chennai is determined depending on the decision of the Bullion Association in accordance with the international stock exchange.

Factors Affecting Gold Rate in Chennai

To buy gold in Chennai, it is necessary for an individual to understand the various factors that have a major impact on its price. The strength of the US dollar:

It is imperative to know that when US dollar becomes strong, the gold price in Chennai slips down as people start investing in the currency rather than a metal. Similarly, when the US dollar weakens, the gold price in Chennai goes sky high as people tend to invest in gold instead of making an investment in a depreciating asset. With gold being a dollar-dependent asset, its changing dynamics directly have an impact on the gold rate in Chennai.

  • Import cost: Huge chunk of gold in Chennai is imported. This means that gold becomes expensive if the import costs are high.
  • Season: Demand for gold in Chennai rises during the time of festivals and wedding ceremonies.
  • Inflation: Ideally, gold is purchased as a hedge against inflation. When inflation rises, the gold rates in Chennai too are likely to witness an all-time high.
  • Demand and supply ratio: Chennai’s contribution to gold production amounts merely to 0.75%. Since the production of gold is very limited and its supply too is unstable, the gold prices in Chennai rise due to the volatile demand and supply ratio.
  • Production costs: It is important to note that gold mining requires large utilisation of energy and gold rates are sure to get impacted if the mining companies increase the production costs.
  • FD rates: Fixed deposits are one of the popular investment options in India. However, when the FD interest rates fall, people invest in gold due to which the demand for gold rises and eventually the rate of gold too rises.
  • Economic stability: Gold is considered a stable asset to invest in, and during the time of economic instability, people prefer investing money in gold rather than any other risky investment channel/avenue.

Who determines the Gold Rate in Chennai?

In the city of Chennai, gold rates are fixed twice in a day. The rate at which the trading for gold commences at the start of the day is called the open rate and the rate at which he trading concludes is called the closing price. Madras Jewellers and Diamonds Association is responsible for fixing the gold rate every day. Many jewellers in Chennai are members of MJDMA who are notified about the changing gold rates.

Why is the Gold rate in Chennai Different from Other Cities of India?

  • Cost of transportation: Chennai is a port city that imports most of its gold. Cities that are located far away from the port have high gold rate compared to other cities.
  • Taxes: Different taxes prevailing in the city vary and this can lead to variation in the rate of gold in Chennai.
  • The volume of demand for gold in Chennai: Chennai is a large city with a huge population due to which the gold rate in Chennai is different in various areas. In the rural area of Chennai, gold rates are high compared to the densely populated areas, as in such areas people trade gold in huge quantities.

How to invest in Gold in Chennai?

One of the popular ways of investing in gold in Chennai is buying gold ornaments. However, with the new investment avenues, investors are also investing in Gold ETFs.

Here are a few gold investment options in Chennai:

  • Gold coins and bars: Gold coins and bars are available in various karats and grams, and can be easily purchased from banks or a jeweller. It is important to note that banks do not take the coins and bars back, but jewellers do. Also, banks charge an additional cost for providing you with gold purity certificate.
  • Gold jewellery: Gold jewellery can be purchased in the form of rings, necklaces, earrings and others. Gold ornaments include making charges that are included in the purchase cost. However, on selling gold ornaments an individual is likely to get a low selling price as the making charge is not considered.
  • GOLD ETFs: In simple terms, Gold ETFs are units representing physical gold in paper or dematerialized form. Known as an exchange-traded fund, Gold ETFs consist of only one principal asset i.e. the gold that acts as an individual stock that invests in gold as commodity ETF. Gold ETFs can be traded at the stock exchange in the similar fashion as that of the other stocks.
  • Gold Mutual Fund: One can invest in gold mutual funds just as an investment is made in an equity or debt funds. Investment in gold mutual fund can be made like fund of funds i.e. FOF that focuses on holding units of other gold-related funds or you can opt for a gold-related mutual fund that holds stocks of gold companies listed on the global stock exchanges.

Things to consider before investing in Gold in Chennai

Since you are investing your hard-earned money in buying gold, it is imperative that you understand every aspect of it before making a purchase.

Here are a few things to consider while investing in gold in Chennai:

  • Gold purity: Purity of gold is one of the most important factors to consider while buying gold in Chennai. Purity is measured in karats that is based on the level of gold content in the gold item you are buying. Gold purity is categorized as 24K, 22K, 18K, 14K and 10K. 24K gold costs more compared to other karats.
  • Check for the hallmark: While buying gold, you should understand that not all that glitters is gold. Due to this, the Bureau of Indian Standards (BIS) has set certain standards to be followed by jewellers while selling gold items. To ensure that gold that is sold is pure and has not lost its purity, the BIS has stated the below hallmarking standards: The gold sold should have a BIS triangular stamp, BIS hallmark logo, Jeweller’s identification and purity measure.
  • Labour charges: In simple terms, the labour charge means the making charge involved in creating a jewellery item. Making charges are different for various jewellery items as each item has its own fine detailing and complexity. Labour charges are largely influenced by the current market rate. So, while buying jewellery, it’s always important that you consider your jeweller to provide you with a fixed making charge as it can reduce the cost of the jewellery.
  • Check for its weight: Gold in India is sold on the basis of its weight. Addition of precious gems makes the jewellery item appear heavier, thus negating the actual value of gold.
  • Ask for the invoice: While buying gold, ensure that you always ask for the invoice of the gold purchase you made. This is because having an invoice helps you in case of discrepancies and also provides you appropriate money while you are selling the gold.
  • Time of the purchase: While you plan to invest in gold in Chennai, keep in mind the time of the purchase as gold rates go sky high during the time of festivals and weddings.

FAQs on Gold Rate in Chennai

Are there any gold hallmarking centres in Chennai?

Yes, there are over 21 BIS hallmarking centres in Chennai.

What are the popular gold ornaments in Chennai?

As per a survey conducted by the World Gold Council, bangles and chains contribute for over 30-40% of the overall gold ornaments demand in Chennai. While, Necklaces contribute to be between 15-20% and rings, earrings and finger rings are in 5-15% in demand.

Which are the well-known jewellers in Chennai?

Few of the well-known jewellers in Chennai are GRT jewellers, Tanishq, Lalithaa Jewellery, Joyalukkas, Prince Jewellery, Vummidi Bangaru Jewellers and others.

Is there a GST impact on gold price in Chennai?

Yes, gold rate in Chennai is affected by the GST as 3% GST is levied on the purchase of gold.

How can I double check BIS hallmark in Chennai?

You can double check BIS hallmark at any of the 21 hallmarking centres in the city. This will require you to pay a certain amount and you will be provided with an Assayreport on request. In case the gold purchase is found out to be of lesser quantity, then with the BIS hallmarked assured, the testing charges paid by you will be refunded.

What is the difference between KDM and hallmark jewellery in Chennai?

BIS hallmark certifies that the gold you are purchasing is pure and it consists of the below four elements:

  • BIS logo
  • Jewellers logo
  • Purity mark
  • Assaying centre’s logo

In simple terms, KDM gold is cadmium-soldered gold. KDM is an alloy of gold and cadmium consisting of 92% of gold and 8% cadmium. KDM has a melting point lower than that of other alloys and also maintains the gold purity, even when melted. However, KDM is now discontinued as it has proven to be hazardous to health.

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