Gold has occupied a unique position in India’s financial and cultural landscape for centuries. It is purchased for weddings and festivals, held as a store of value, used as collateral, and increasingly considered as part of a diversified investment portfolio. Beyond personal ownership, gold also represents a significant commercial market involving refiners, bullion dealers, wholesalers, retailers, importers, exporters, jewellers, financial institutions, and individual investors.

Physical gold trading refers to the buying and selling of tangible gold products such as bars, coins, bullion, and jewellery. Unlike digital gold or exchange-traded products, physical gold gives the buyer direct ownership and possession of a tangible asset.

In 2026, India’s physical gold market continues to present opportunities for investors and businesses, but successful participation requires more than simply following the gold price. Buyers and traders need to understand purity, pricing, taxation, documentation, liquidity, storage, security, compliance, and dealer margins.

India’s gold market is also supported by a formal regulatory framework. The Bureau of Indian Standards (BIS) operates India’s hallmarking system, which provides third-party assurance regarding the purity or fineness of eligible precious-metal articles.

This guide explains how physical gold trading works in India, how individuals and businesses can participate, the factors that influence profitability, and the risks that should be considered before entering the market.

Important: Tax rates, customs duties, regulatory requirements, and business-compliance rules can change. Readers should verify the applicable rules with the relevant government authority or a qualified tax/legal professional before making significant transactions.

What Is Physical Gold Trading?

Physical gold trading is the process of purchasing and selling actual gold in tangible form.

Unlike financial instruments that only provide exposure to gold prices, physical gold represents ownership of a specific quantity and purity of the metal.

Common forms include:

• Gold bars
• Gold bullion
• Gold coins
• Gold biscuits
• Gold jewellery
• Gold medallions
• Certain semi-finished gold products

The trading process can occur between:

Refinery → Wholesaler → Distributor → Retailer → Consumer

There can also be transactions between businesses, investors, jewellers, bullion dealers, and other eligible market participants.

The value of physical gold generally depends on several factors:

Gold Value = Weight × Purity × Applicable Gold Rate

However, the actual purchase or resale price may also include premiums, making charges, dealer margins, taxes, refining costs, transportation costs, and other transaction-related expenses.

This distinction is important because a rise in the market gold price does not automatically mean that every physical gold holder or trader will earn an equivalent return.

How the Physical Gold Market Works in India

India’s physical gold ecosystem is made up of multiple interconnected participants.

Major Participants

1. Gold Producers and Miners

Gold originates from mining operations around the world and enters the international supply chain.

2. Refiners

Gold is refined to meet required purity standards and converted into bars or other forms.

3. Importers

India imports a substantial portion of its gold requirements. Imported gold enters the domestic market through authorised channels subject to applicable regulations and duties.

4. Bullion Dealers

Bullion dealers facilitate wholesale transactions involving gold bars, coins, and other forms of investment-grade gold.

5. Wholesalers and Distributors

They supply gold products to retailers, jewellers, and other businesses.

6. Jewellers and Retailers

They sell gold jewellery, coins, bars, and related products to consumers.

7. Consumers and Investors

Individuals purchase gold for investment, wealth preservation, gifting, personal use, and cultural purposes.

The market therefore operates as a supply chain rather than as a single marketplace.

Types of Physical Gold Traded in India

Different forms of gold serve different purposes.

Gold Bars and Bullion

Gold bars are commonly used for investment and wholesale transactions. Larger bars are generally associated with institutional or professional participants, while smaller bars are more accessible to individual investors.

Investment-grade bullion is typically valued primarily according to its weight and purity.

Gold Coins

Gold coins are available in different weights and designs. They may be purchased for investment, gifting, religious occasions, or commemorative purposes.

However, buyers should compare the actual gold value with the total purchase price because small products can carry relatively higher premiums.

Gold Jewellery

Jewellery represents one of India’s most significant forms of physical gold ownership.

However, jewellery pricing can include:

• Gold value
• Making charges
• Wastage or other charges where applicable
• Precious stones or other materials
• Taxes
• Retailer margins

Therefore, jewellery should not automatically be treated as equivalent to investment bullion.

Gold Biscuits

Gold biscuits are small gold bars generally purchased for investment or gifting purposes.

Gold Medallions

Gold medallions are often purchased for gifting, commemorative purposes, or special occasions.

How Gold Prices Are Determined in India

The domestic price of gold is influenced by both international and Indian market conditions.

International Gold Prices

Gold is traded globally, and international benchmark prices significantly influence Indian prices.

Currency Exchange Rates

Because international gold prices are commonly quoted in US dollars, movements in the USD/INR exchange rate can influence the domestic price.

A weaker rupee can increase the rupee-denominated cost of imported gold, all else being equal.

Import Duties and Taxes

Import-related duties and domestic taxes affect the landed cost of gold and therefore influence domestic pricing.

For example, the Union Budget 2024-25 reduced the effective customs duty structure for gold bars to 6% through changes to basic customs duty and Agriculture Infrastructure and Development Cess.

Because customs policy can change, traders should verify the current applicable rates before importing or pricing gold.

Domestic Demand and Supply

Demand from:

• Jewellery manufacturers
• Retail consumers
• Investors
• Wholesalers
• Festivals
• Wedding seasons

can influence premiums and local market conditions.

Dealer Premiums

The price quoted by a dealer may differ from a headline market gold price because of:

• Product size
• Purity
• Refinery brand
• Market liquidity
• Dealer margin
• Transportation
• Insurance
• Demand and supply

Therefore, traders should distinguish between the reference gold price and the actual transaction price.

How to Buy Physical Gold in India

Buying physical gold requires careful evaluation rather than simply selecting the lowest quoted price.

Step 1: Determine Your Objective

First decide whether you are purchasing gold for:

• Long-term investment
• Short-term trading
• Jewellery
• Gifting
• Business inventory
• Wealth preservation

Your objective determines which form of gold may be most suitable.

Step 2: Select a Reliable Seller

Choose an established and properly compliant seller. For eligible hallmarked jewellery and artefacts, buyers should check the seller’s BIS registration and relevant product markings.

BIS provides a list of licensed jewellers through its official website.

Step 3: Verify Purity

Understand whether the product is:

• 24K
• 23K
• 22K
• 18K
• 14K
• Or another declared fineness

For hallmarked gold jewellery, BIS recognises specific caratage/fineness grades, including 14K (585), 18K (750), 20K (833), 22K (916), 23K (958), and 24KS (995).

Step 4: Check the Hallmark

For hallmarked gold jewellery, the current hallmark includes the BIS logo, purity/fineness marking, and a six-digit alphanumeric HUID. The HUID can be checked through the BIS Care App.

Step 5: Compare the Total Cost

Do not compare only the advertised gold rate. Compare the complete invoice.

Step 6: Obtain a Proper Invoice

A proper invoice provides an important record of the transaction and supports future resale, accounting, taxation, and dispute resolution.

BIS guidance states that invoices for hallmarked articles should contain relevant details such as the article description, net precious-metal weight, purity/fineness, and hallmarking charges.

Understanding Gold Purity and Hallmarking

Purity determines how much actual gold is contained within a gold product.

For example:

• 24K generally represents very high-purity gold.
• 22K contains less pure gold than 24K and is widely used for jewellery.
• 18K contains a lower proportion of gold and a higher proportion of other metals.

What Is Hallmarking?

Hallmarking is the official determination and recording of the proportionate precious-metal content in an article.

BIS describes hallmarking as a system that provides assurance regarding the purity or fineness of precious-metal articles.

What Is HUID?

HUID stands for Hallmark Unique Identification.

It is a six-digit alphanumeric identification number associated with a hallmarked gold jewellery article and can be verified using the BIS Care App.

Gold Bullion and Hallmarking

It is important not to assume that jewellery hallmarking rules apply identically to every gold product. BIS states that the mandatory hallmarking order applies to gold jewellery and artefacts, while gold bullion and coins of 999/995 fineness are handled under separate provisions and may be hallmarked by BIS-approved refineries or mints.

How to Sell Physical Gold in India

Selling physical gold involves more than checking the day’s gold price.

Where Can You Sell Gold?

Depending on the product and circumstances, gold may be sold to:

• Jewellery retailers
• Bullion dealers
• Refineries
• Other authorised market participants

Factors That Affect the Selling Price

The resale value may depend on:

• Weight
• Purity
• Current gold price
• Product type
• Brand/refinery
• Market demand
• Dealer margin
• Testing/refining costs
• Condition and documentation

Why the Purchase and Selling Prices Differ

A dealer may buy gold below the prevailing retail price because the dealer needs to account for:

• Refining
• Testing
• Operating costs
• Market risk
• Working capital
• Profit margin

Consequently, investors should understand the buy-sell spread before purchasing gold for short-term trading.

Physical Gold Trading vs Physical Gold Investment

Although these terms are often used interchangeably, they represent different approaches.

Focuses on buying and selling	Focuses on long-term ownership
May involve shorter holding periods	Usually involves longer holding periods
Profit depends on price movements and spreads	Primarily focused on wealth preservation/appreciation
Requires active market monitoring	Requires comparatively less frequent transactions
Transaction costs can significantly affect returns	Storage and holding costs become important
Suitable for active market participants	Often considered for portfolio diversification

A trader may attempt to benefit from price movements, while an investor may hold gold for years as part of a broader wealth strategy.

Gold Bullion Trading in India

Gold bullion generally refers to investment-grade gold in forms such as bars and certain coins.

Bullion trading is particularly relevant to:

• Bullion dealers
• Jewellery manufacturers
• Wholesalers
• Importers
• Refiners
• Institutional participants
• High-value investors

Important Factors in Bullion Trading

A bullion trader needs to monitor:

• International gold prices
• Domestic spot prices
• Currency movements
• Import-related costs
• Market premiums
• Liquidity
• Refinery premiums
• Dealer spreads
• Counterparty risk

For larger transactions, documentation, source verification, inventory control, insurance, secure logistics, and regulatory compliance become particularly important.

Gold Wholesale Trading and the B2B Market

Wholesale gold trading connects major suppliers with businesses that require gold for manufacturing, retail, investment, or other legitimate commercial purposes.

The B2B market may involve:

Refiner → Bullion Dealer → Wholesaler → Manufacturer/Jeweller → Retailer

Wholesale trading can offer opportunities through transaction volume rather than large margins per unit.

However, higher transaction volumes also increase exposure to:

• Price volatility
• Counterparty risk
• Working-capital requirements
• Inventory risk
• Compliance requirements
• Security risks

A successful wholesale business therefore requires strong systems for procurement, pricing, inventory reconciliation, customer verification, invoicing, accounting, and risk management.

How to Start a Physical Gold Trading Business in India

Starting a gold trading business requires careful planning and appropriate professional advice.

Step 1: Choose the Business Model

Possible models include:

• Gold bullion dealership
• Gold wholesale trading
• Gold retailing
• Jewellery business
• Gold coin and bar distribution
• B2B gold supply
• Refining-related business

Step 2: Establish the Business Entity

Choose an appropriate legal structure such as a:

• Proprietorship
• Partnership
• LLP
• Private limited company

The appropriate structure depends on ownership, capital, liability, taxation, financing, and future expansion plans.

Step 3: Arrange Working Capital

Gold is a high-value commodity, so significant working capital may be required.

Capital may be needed for:

• Inventory
• Premises
• Security
• Insurance
• Employees
• Technology
• Logistics
• Compliance
• Operating expenses

Step 4: Build Reliable Supplier Relationships

Supplier selection is critical. Businesses should evaluate:

• Reputation
• Purity standards
• Documentation
• Pricing
• Delivery reliability
• Buyback arrangements
• Refinery relationships

Step 5: Develop a Pricing System

Your pricing model should account for:

Cost of Gold + Premium + Taxes + Logistics + Operating Costs + Margin

Step 6: Implement Security Controls

Physical gold requires robust:

• CCTV
• Access control
• Secure storage
• Insurance
• Transportation procedures
• Inventory reconciliation

Step 7: Maintain Complete Records

Maintain records for:

• Purchases
• Sales
• Inventory
• Invoices
• Customers
• Suppliers
• Payments
• Taxes
• Testing and purity documentation

For businesses dealing with substantial values, professional accounting, tax, legal, and compliance advice is highly recommended.

Legal and Regulatory Considerations for Physical Gold Trading in India

Gold trading operates within India’s broader framework of taxation, customs, consumer protection, hallmarking, business regulation, and financial compliance.

Businesses should identify which requirements apply to their exact activity rather than assuming that one set of rules applies to every gold business.

For example, BIS states that manufacturers, wholesalers, distributors, and retailers involved in selling hallmarked precious-metal articles generally require BIS registration, subject to specified exemptions.

Businesses should also consider:

• Business registration
• GST registration, where applicable
• BIS requirements
• Import/export requirements, where applicable
• Customs regulations
• Accounting and invoicing
• Consumer protection requirements
• Applicable AML/KYC obligations
• Local commercial regulations
• Income-tax requirements

Regulations can differ depending on whether the business deals in jewellery, bullion, imports, exports, refining, manufacturing, or retail.

Taxes on Physical Gold in India

Taxation is an important component of physical gold trading.

GST

Gold and specified precious-metal products fall within the GST framework. CBIC’s published GST rate schedule shows gold under heading 7108 at 3% GST.

For jewellery, CBIC’s sectoral FAQ states that GST is charged at 3% of the total transaction value of jewellery, whether making charges are shown separately or not.

Capital Gains Tax

For individuals holding physical gold as an investment, profits on sale may fall under capital-gains taxation, subject to the applicable tax law and the taxpayer’s circumstances.

The holding-period rules and tax rates have changed over time, so historical articles should not be relied upon without checking the rules applicable to the relevant assessment year.

The Income Tax Department explains that gains arising from the transfer of a capital asset are generally charged under the head “Capital Gains.”

Business Income

If gold is held as trading stock in a business, the tax treatment can differ from that of an individual holding gold as a capital asset.

Therefore, traders should maintain proper books and consult a tax professional regarding:

• Inventory valuation
• Business income
• GST
• Capital assets
• Capital gains
• Input tax credit
• Applicable deductions

Costs Involved in Physical Gold Trading

The profitability of physical gold trading depends heavily on controlling costs.

Common costs include:

Purchase Premium

Dealers may charge a premium over the reference gold price.

Making Charges

These are particularly relevant to jewellery.

Taxes

Applicable GST and other statutory charges affect the final transaction cost.

Storage

Professional vaults, bank lockers, or secure business premises can involve recurring costs.

Insurance

Insurance may be required to protect high-value inventories.

Transportation

Gold transportation requires appropriate security and may be expensive.

Testing and Refining

Testing and refining expenses can affect resale economics.

Dealer Spread

The difference between buying and selling prices can significantly influence short-term profitability.

A trader should calculate the all-in cost before entering a transaction.

How to Calculate Profit and Loss in Physical Gold Trading

A simple calculation can be used to understand the basic economics.

Basic Formula

Gross Profit = Selling Value − Purchase Cost

However, actual trading profit should account for all associated costs.

More Complete Formula

Net Profit = Selling Revenue − Purchase Cost − Taxes − Premiums − Storage − Insurance − Transportation − Other Expenses

Example

Suppose a trader purchases 100 grams of gold at an effective cost of ₹7,000 per gram.

Purchase Cost = 100 × ₹7,000 = ₹7,00,000

If the gold is later sold at ₹7,400 per gram:

Selling Value = 100 × ₹7,400 = ₹7,40,000

Gross Price Difference = ₹40,000

But this is not necessarily the final profit.

If the trader incurred ₹15,000 in combined transaction, storage, testing, and other expenses:

Estimated Net Profit = ₹40,000 − ₹15,000 = ₹25,000

This example is purely illustrative and does not represent a forecast or guaranteed return.

Key Factors That Influence Physical Gold Trading Opportunities

Several factors can influence India’s physical gold market.

Global Gold Prices

International economic conditions, interest rates, inflation expectations, geopolitical developments, and investor demand can influence gold prices.

Indian Rupee

Currency movements can affect the domestic rupee price of imported gold.

Domestic Jewellery Demand

Wedding seasons, festivals, and consumer sentiment can influence physical demand.

Central Bank Policies

Changes in monetary policy can affect investor demand for gold.

Inflation

Gold is often viewed as a store of value during periods of economic uncertainty and inflation concerns.

Import Policies

Changes in customs duties and import regulations can affect domestic prices and market economics.

Investment Demand

Growing interest from investors can influence physical bullion demand and premiums.

Benefits of Trading Physical Gold in India

Physical gold trading can offer several advantages.

Tangible Ownership

Unlike many financial products, physical gold represents a tangible asset.

Established Market

India has a long-established ecosystem of gold consumers, jewellers, wholesalers, dealers, and refiners.

Portfolio Diversification

Gold can play a diversification role within a broader investment strategy.

Multiple Business Models

Entrepreneurs can participate through retail, wholesale, bullion distribution, manufacturing, or related services, subject to applicable regulations.

Potential for Long-Term Value Preservation

Gold has historically been used as a store of value, although its market price can fluctuate significantly.

Strong Consumer Recognition

Gold has strong cultural and commercial relevance in India, supporting a broad ecosystem around the metal.

Risks and Challenges of Physical Gold Trading

Physical gold is not risk-free.

Gold Price Volatility

Gold prices can rise or fall quickly, affecting inventory values and trading positions.

Liquidity Risk

Although gold is generally widely recognised, the price available from a particular buyer may be below the current headline market price.

Storage Risk

Physical gold requires secure storage.

Theft Risk

High-value inventory can become a security target.

Purity Risk

Incorrect or fraudulent purity claims can create substantial financial losses.

BIS provides consumer mechanisms for testing gold articles through recognised Assaying & Hallmarking Centres.

Counterparty Risk

Businesses need to assess suppliers and buyers carefully, particularly for large transactions.

Regulatory Risk

Taxation, import duties, hallmarking rules, and other regulations can change.

Working-Capital Risk

Businesses carrying large inventories may face significant capital requirements and price exposure.

How to Store Physical Gold Safely

Storage is one of the most important considerations in physical gold ownership and trading.

Bank Safe Deposit Locker

A bank locker can provide a secure storage environment, although users should understand the bank’s terms and their own insurance requirements.

Professional Vault

Businesses and high-value investors may consider professional precious-metal vaulting services.

Secure Business Premises

Commercial traders may maintain gold in controlled premises with:

• CCTV
• Alarm systems
• Restricted access
• Safes or vaults
• Visitor controls
• Inventory monitoring

Insurance

Insurance should be evaluated based on:

• Amount of gold held
• Location
• Transportation arrangements
• Security systems
• Coverage limits
• Policy exclusions

The larger the inventory, the more important professional security and risk-management procedures become.

Physical Gold vs Digital Gold vs Gold ETFs

Investors have several ways to gain exposure to gold.

Tangible ownership	Yes	No physical possession	No direct possession
Storage required	Yes	Generally no personal storage	No
Liquidity	Depends on buyer/market	Generally convenient	Exchange-based
Purity concerns	Need to verify product	Depends on provider structure	Fund structure
Transaction costs	Can be significant	Provider-dependent	Brokerage/fund costs
Suitable for	Tangible ownership & long-term holding	Convenient digital exposure	Market-based investment exposure

The “best” option depends on the investor’s objectives, risk tolerance, liquidity requirements, costs, and preference for physical ownership.

Physical Gold Trading Strategies for Beginners

Beginners should focus on risk management rather than trying to predict every short-term price movement.

Strategy 1: Buy and Hold

Purchase physical gold with a long-term perspective rather than attempting frequent transactions.

Strategy 2: Staggered Purchases

Instead of investing the entire amount at once, some investors may spread purchases across different periods.

Strategy 3: Focus on Lower-Premium Products

For investment purposes, investors may compare the premium charged on bullion products rather than focusing only on the headline gold price.

Strategy 4: Track the Buy-Sell Spread

Always know the approximate price at which you can realistically sell the product before buying it.

Strategy 5: Maintain Documentation

Keep:

• Invoices
• Purity details
• Product information
• Payment records
• Storage records

Strategy 6: Avoid Excessive Leverage

Physical gold trading can already involve significant capital. Excessive borrowing can magnify losses when prices move against the trader.

Common Mistakes to Avoid When Buying and Selling Physical Gold

Mistake 1: Buying Without Checking Purity

Always verify the declared purity and applicable hallmark information.

Mistake 2: Focusing Only on the Gold Rate

The lowest advertised gold rate does not necessarily represent the lowest total cost.

Mistake 3: Ignoring Dealer Premiums

Premiums can significantly affect returns, particularly for smaller products.

Mistake 4: Not Taking an Invoice

Proper documentation is essential for record-keeping and future transactions.

Mistake 5: Ignoring Storage Costs

Physical gold requires a security plan.

Mistake 6: Trading Without Understanding Taxation

Tax treatment can affect actual returns.

Mistake 7: Assuming Every Gold Product Has the Same Resale Value

Jewellery, coins, bars, and bullion can have different spreads and resale economics.

Mistake 8: Investing Based on Short-Term Predictions

Gold prices are influenced by multiple global and domestic factors. No market forecast is guaranteed.

How Technology Is Transforming Physical Gold Trading in India

Technology is improving several areas of the physical gold ecosystem.

Digital Price Monitoring

Traders can monitor domestic and international prices in real time.

Digital Invoicing

Electronic invoices improve transaction records and accounting.

Inventory Management

Businesses can use software to track:

• Weight
• Purity
• Product IDs
• Purchase cost
• Selling price
• Inventory movement

Digital Verification

The BIS Care App allows consumers to verify HUID information for hallmarked gold jewellery.

Secure Logistics

Technology-enabled tracking can improve the visibility and security of high-value shipments.

Data Analytics

Businesses can analyse demand patterns, customer behaviour, inventory turnover, margins, and pricing to make better commercial decisions.

Future Opportunities in India’s Physical Gold Market

India’s gold ecosystem offers opportunities beyond conventional jewellery retail.

Potential areas include:

• Bullion distribution
• Gold wholesale trading
• Refining
• Assaying and testing
• Secure vaulting
• Gold logistics
• Technology-enabled gold inventory management
• B2B bullion marketplaces
• Responsible sourcing
• Gold recycling
• Gold-backed financial services
• Export-oriented precious-metal businesses

The opportunity for entrepreneurs is particularly interesting where technology, transparency, compliance, and efficient supply chains can improve the traditional gold ecosystem.

At the same time, new businesses must enter the market with a clear understanding of capital requirements, regulation, security, and risk management.

Gold Trading Trends and Market Outlook for 2026

The physical gold market in 2026 is being shaped by several structural themes.

Continued Global Economic Uncertainty

Economic uncertainty can influence investor interest in traditional safe-haven assets such as gold.

Currency Movements

Changes in the Indian rupee can influence the domestic price of internationally traded gold.

Growing Focus on Transparency

Consumers increasingly want verifiable purity, clear pricing, proper invoices, and trusted sellers.

Technology Adoption

Digital pricing, inventory management, verification, analytics, and secure logistics are becoming increasingly important.

Formalisation of the Gold Ecosystem

Regulatory frameworks and hallmarking mechanisms are contributing to greater transparency in parts of the gold market.

BIS continues to update India’s hallmarking framework; its official 2026 updates include amendments to the mandatory hallmarking framework and additional districts covered by the scheme.

Increasing Business Opportunities

As India’s gold ecosystem becomes more organised, opportunities may emerge across bullion, refining, recycling, logistics, technology, testing, and B2B trading.

However, market conditions can change rapidly. Therefore, businesses and investors should base decisions on current market data rather than relying solely on historical trends.

Conclusion

Physical gold trading can present meaningful opportunities in India in 2026, but it should be approached as a structured market rather than simply a way to profit from rising gold prices.

For individual investors, the key considerations include purity, product selection, purchase premiums, resale spreads, taxation, documentation, and secure storage.

For entrepreneurs, the opportunity extends further into bullion trading, wholesale distribution, retail, refining, logistics, technology, testing, and other parts of the gold value chain.

The most successful participants are likely to be those who combine strong market knowledge with disciplined pricing, reliable counterparties, proper documentation, regulatory compliance, effective inventory management, and robust security systems.

Ultimately, physical gold can be valuable as an asset and as a business opportunity, but profitability is never guaranteed. Before making a significant investment or starting a gold trading business, it is advisable to obtain current regulatory, tax, legal, and financial advice.

Frequently Asked Questions (FAQs

1. What is physical gold trading in India?

Physical gold trading involves buying and selling tangible gold products such as bars, bullion, coins, and jewellery.

2. Is physical gold a good investment in India?

Physical gold can form part of a diversified investment strategy, but returns are not guaranteed. Investors should consider pricing, taxes, storage, liquidity, and resale spreads.

3. What is the difference between physical gold and digital gold?

Physical gold is a tangible asset that you can possess. Digital gold provides digital exposure to gold through a provider’s structure without requiring you to personally store the metal.

4. What is gold bullion?

Gold bullion generally refers to investment-grade gold, particularly bars and certain coins, whose value is primarily linked to weight and purity.

5. What gold purity is best for investment?

Higher-purity bullion is generally preferred when the objective is investment exposure to gold. However, investors should also compare premiums, liquidity, and resale terms.

6. What is BIS hallmarking?

BIS hallmarking is a system that provides third-party assurance regarding the purity or fineness of eligible precious-metal articles.

7. What is HUID in gold?

HUID stands for Hallmark Unique Identification. It is a six-digit alphanumeric identifier used for hallmarked gold jewellery and can be verified through the BIS Care App.

8. Is GST applicable to physical gold in India?

Yes. Gold under the applicable GST classification is currently listed at 3% GST.

9. Does GST apply to gold jewellery?

Yes. CBIC states that GST on jewellery is 3% of the total transaction value, whether making charges are separately shown or not.

10. Can physical gold be sold for cash?

Gold transactions must comply with applicable tax, payment, invoicing, and reporting requirements. Buyers and sellers should use proper documentation and comply with applicable restrictions on cash transactions.

11. Where can I sell physical gold?

Depending on the product and circumstances, physical gold can potentially be sold to established jewellers, bullion dealers, refiners, and other authorised market participants.

12. How can I verify gold purity?

For eligible hallmarked jewellery, buyers can check the BIS hallmark and HUID. Consumers can also use BIS-recognised Assaying & Hallmarking Centres for testing.

13. Is physical gold trading profitable?

It can be profitable, but profitability depends on purchase price, selling price, spreads, taxes, operating costs, market conditions, and risk management. There is no guaranteed return.

14. What are the biggest risks of physical gold trading?

Major risks include price volatility, theft, storage costs, purity concerns, liquidity differences, counterparty risk, regulatory changes, and working-capital requirements.

15. How can I start a physical gold trading business in India?

Start by selecting a business model, establishing the appropriate business structure, arranging sufficient working capital, identifying reliable suppliers, understanding GST/BIS and other applicable regulations, implementing security controls, and maintaining proper accounting and inventory records.