The purity and quality of gold is something buyers are always apprehensive of. There are different types of gold that buyers can choose from. Buyers often have a tough time distinguishing between the Hallmark gold and the KDM gold.
1) Hallmark Gold: Hallmark gold is the type of gold upon which, tests are conducted at assaying centers and is approved for sale by the Bureau of Indian Standards (BIS). Hallmark gold is available in four varieties being 23 Karat, 22 Karat, 21 Karat, and 18 Karat.
2) KDM Gold: KDM gold is a type of gold made combining 8% cadmium with 92% gold. Not only does this tamper with the purity of gold, but it also has certain health risks associated with it because of which the production of this gold has been terminated.
'Karat' represents the proportion of gold present in an alloy. It indicates the fineness of gold, which implies that the higher the karat, the more the purity of gold.
The implementation of GST has particularly affected the prices of commodities like gold.
Effect of GST on Gold Prices
As per the new tax structure, the GST on gold is set at 3% for both finished and unfinished products, which will be paid by the end consumer.
Apart from this, the tax regime also levies an additional 5% on making charges of gold jewellery. The additional charges have upshot the price of gold as there were no making charges in the previous taxation system. This rate is, however, a revised version which was initially set at 18%. The initial GST on making charges would have affected the prices of the finished products massively since end-consumers had to bear all the expenses. However, the 3% GST, the 10% import duty, and 5% making charges have made the yellow metal’s price increase by 0.75%.
Quantitative easing, or commonly known as QE, is an economic policy. It comes into action, in case other policies have run out of steam and stopped working.
The connection between QE and Gold is inversely proportional. It means, with the implementation of quantitative easing, the price of gold drops and vice versa. Thus, conservative investors, who believe gold is the future, advises investing more in gold, instead of other modes.
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