Indian Gold Book:Indian Gold Book - Gold Bars Worldwide

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PRICING AND PROFITABILITY Top end retailers The labour charge for some standard machine-made items can be 10 - 20% less than standard handmade items. Category Handmade Labour charge per gramme Rs Approx US$ Necklace 40 - 200 0.80 - 4.20 Bangle 30 - 100 0.60 - 2.10 Chain 30 - 80 0.60 - 1.60 Earrings 75 - 100 1.60 - 2.10 Ring 75 - 100 1.60 - 2.10 Category Machine-made Labour charge per gramme Rs Approx US$ Necklace 40 - 200 0.80 - 4.20 Bangle 30 - 80 0.60 - 2.10 Chain 30 - 70 0.60 - 1.40 Earrings 60 - 90 1.20 - 1.90 Ring 50 - 70 1.00 - 1.40 Small suburban and rural retailers that fabricate on-site The table below illustrates how jewellery can sometimes be priced with a fixed labour charge in rupees per item. Category Weight Handmade Fixed labour charge Rs Approx US$ Necklace 25 g 200 4.20 Bangle 10 g 100 2.10 Earrings 6 g 100 2.10 Ring 5 g 100 2.10 The table below illustrates how jewellery can sometimes be priced in rupees per gramme, regardless of the category, at different (and decreasing) rates according to the weight of the item. Item weight Handmade Variable labour charge per gramme Rs Approx US$ 2 g 25 0.50 4 g 20 0.40 8 g 15 0.30 24 g 10 0.20 Crude “money” jewellery The labour charge can be as low as Rs 2 - 5 per gramme (plus wastage) for simple items in K24, K23 and K22 at specified weights. For example, a retailer may stock a range of crude rings weighing 1/2, 1, 2, 3, 4, 5 and 10 grammes, and crude bangles at heavier weights. Wastage charges The wastage charge, sometimes referred to as a “polishing” charge, is intended to cover the gold lost in the fabrication and polishing of gold jewellery, and in many cases to contribute towards the total cost of the jewellery. For example, if the wastage charge is high, it enables the labour charge to be lower. While most outlets levy a wastage charge, it can also be absorbed within an overall “value addition” or total fabrication charge (including labour charges). The quoted wastage charge can vary from zero to 10%. A top end wastage charge tends to range between 4 - 8% (although it is often absorbed within a total “value addition” charge). In small suburban and rural areas, it typically ranges between 2 - 4%. 158 AN INTRODUCTION TO THE INDIAN GOLD MARKET
Hallmarking charges The few hundred retailers that currently sell hallmarked jewellery either absorb the cost or increase the labour charge. For example, by Rs 5 - 15 per gramme. Authorised hallmarking centres can set their own charges. For example: Below 20 g Rs 50 per item (US$ 1.00) Above 20 g Rs 75 per item (US$ 1.50) For most retailers hallmarking is an expensive exercise, when obliged to operate competitively at low retail margins. The hallmarking cost for a pair of small earrings (2 items) would be Rs 100. A retailer is also obliged to recover the annual BIS certification fee of Rs 25,800. Exchanging old for new jewellery If the old jewellery had been bought from the same retailer. The customer is normally credited with the quoted K22 carat gold price per gramme, if it had been sold as K22 and cadmium solder had been used. If it had been sold as 22/20 (i.e. a low caratage solder had been used so that after melting the residual gold content would be 10% less than the original weight of the jewellery), the K22 carat gold price per gramme would normally be reduced by 3% or more. The credited value would then be set against the price of the new jewellery. If the old jewellery had been bought from another retailer. The old jewellery would be assayed using a touchstone. As the caratage often turns out to be less than the declared caratage, an appropriately lower carat gold price would apply. In addition, there would be a further reduction: around 10 - 20% if the solder is non-cadmium, and around 8 - 10% if the solder is cadmium (or high caratage). Supplying old jewellery for refashioning into new jewellery Under this system, often used in suburban areas, small towns and villages, gold in any form (but usually accumulated old jewellery) is given to a local retailer or fabricator so that it can be refashioned into new items. The customer can hand over sufficient gold to cover all fabrication costs (i.e. labour and wastage charges). Or he can pay for the fabrication costs in rupees. The prevailing carat gold price is irrelevant to the transaction. The actual caratage of the old and new jewellery is not necessarily an issue. In rural areas in particular, this can be the cheapest way in rupee terms to obtain new gold jewellery provided the goldsmith does not reduce the caratage or retain any recoverable wastage. Customers sometimes watch him as he fabricates the new jewellery. Selling back old jewellery for cash If the old jewellery had been bought from the same retailer. Using the carat gold price, the retailer first calculates its value at the caratage at which it had originally been sold, and then reduces it according to his own declared formula. For example: Around 5% if the solder is cadmium (or high caratage). Around 10% if the solder is non-cadmium. PRICING AND PROFITABILITY If the old jewellery had been bought from another retailer. Most retailers tend not to buy back old jewellery from customers with whom they have not dealt in the past. In the event that they do, the price would tend to be low, often 10% or more below the standard bullion price. Studded gold jewellery All retailers observe that studded jewellery is more profitable than plain gold jewellery. While gross profitability (after fabrication costs) on plain gold jewellery is reported at around 10%, diamond and other studded jewellery can yield 15 - 20% and often much more. Retailers normally advise customers of the breakdown in the cost of diamond (and other precious and semi-precious) jewellery: weight of gold, cost of diamonds, labour charge and taxes. Retailers will exchange old for new diamond jewellery. The customer would usually receive the prevailing break-up value, less the labour charge. However, retailers will normally only buy back diamond jewellery if it had originally been bought from them. The price would be based on the prevailing break-up value, less 15 - 20%. Staff costs In metropolitan cities, wages for counter staff (often 20 or more in large showrooms) are reported to range from less than Rs 5,000 (US$ 100) per month up to Rs 15,000 (US$ 300). AN INTRODUCTION TO THE INDIAN GOLD MARKET 159
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AN INTRODUCTION TO THE INDIAN GOLD
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INDUSTRY SUPPORT MAJOR SPONSOR CORP
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PREFACE An Introduction to the Indi
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ACKNOWLEDGEMENTS GIR FIELDTRIPS GIR
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Raman Jethi Ramchand Popley Ramesh
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SUMMARY AND POSITIVE FINDINGS BACKG
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SUMMARY AND POSITIVE FINDINGS To ma
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SUMMARY AND POSITIVE FINDINGS The a
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SUMMARY AND POSITIVE FINDINGS POSIT
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SUMMARY AND POSITIVE FINDINGS INDUS
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ROLE OF INDIAN GOVERNMENT The India
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ROLE OF INDIAN GOVERNMENT The Depar
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ROLE OF INDIAN GOVERNMENT OFFICIAL
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ROLE OF INDIAN GOVERNMENT In summar
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ROLE OF INDIAN GOVERNMENT GOLD CONT
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ROLE OF INDIAN GOVERNMENT LICENSED
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MAP OF INDIA There are 28 States, 6
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POPULATION URBAN AND RURAL State Mi
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POPULATION HOUSEHOLDS - SPLIT BY SO
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ECONOMIC INDICES STATES - INDICATIV
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AGRICULTURE VALUE OF AGRICULTURAL O
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AGRICULTURE MAJOR CROPS - NORMAL AR
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MONSOONS PERFORMANCE OF SOUTH WEST
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IMPORTED GOLD BARS The 10 tola bar
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IMPORTED GOLD BARS 10 TOLA BARS AGR
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IMPORTED GOLD BARS GOLD WEIGHT CONV
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The fine gold content of a London G
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BULLION IMPORTERS UNOFFICIAL IMPORT
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BANKS IMPORTED BULLION PRODUCTS Ban
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WHOLESALING TO DOMESTIC BULLION DEA
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BANKS BACKGROUND INFORMATION ON BAN
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BANKS GOLD CELL BRANCHES Region/Sta
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GOLD DEPOSIT SCHEME DISTRIBUTION Th
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GOLD DEPOSIT SCHEME The State Bank
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PUBLIC SECTOR UNDERTAKINGS BRANCHES
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Region/State City MMTC HHEC STC PEC
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NON-RESIDENT INDIAN (NRI) GOLD IMPO
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BULLION DEALERS A secondary tier bu
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GOLD REFINERS SMALL REFINERS There
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COIN FABRICATORS Corporate gifts Al
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COIN FABRICATORS A bullion dealer t
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BAR HOARDING Some trade entities in
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BULK DELIVERY OF OFFICIAL GOLD IMPO
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BULK DELIVERY OF OFFICIAL GOLD IMPO
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PERSPECTIVE INDIA The gold jeweller
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GOLD JEWELLERY PRODUCTS Handmade je
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REGIONAL JEWELLERY STYLES KOLKATA K
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REGIONAL JEWELLERY STYLES AHMEDABAD
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REGIONAL JEWELLERY STYLES SWAMI JEW
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JEWELLERY FABRICATORS All centres,
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JEWELLERY FABRICATORS JEWELLERY WHO
Page 109 and 110: TRADITIONAL JEWELLERY RETAILERS Sta
Page 111 and 112: TRADITIONAL JEWELLERY RETAILERS Coi
Page 113 and 114: TRADITIONAL JEWELLERY RETAILERS ANT
Page 115 and 116: TRADITIONAL JEWELLERY RETAILERS Man
Page 117 and 118: ADORNMENT DIMENSION Gold jewellery
Page 119 and 120: GOLD JEWELLERY CONSUMERS MARRIAGES
Page 121 and 122: GOLD JEWELLERY CONSUMERS Among larg
Page 123 and 124: GOLD JEWELLERY CONSUMERS RURAL VERS
Page 125 and 126: GOLD JEWELLERY CONSUMERS Gold jewel
Page 127 and 128: GOLD JEWELLERY CONSUMERS INDICATIVE
Page 129 and 130: LUNAR CALENDAR Mumbai (Maharashtra)
Page 131 and 132: BRANDED JEWELLERY RETAIL CHAINS DIS
Page 133 and 134: Region/State Gili Tanishq Carbon In
Page 135 and 136: HALLMARKS In accordance with BIS pr
Page 137 and 138: HALLMARKING Most jewellery in the W
Page 139 and 140: SOURCES OF GOLD BULLION Jewellery e
Page 141 and 142: Location US dollars in millions % S
Page 143 and 144: Plain gold jewellery Location US$ m
Page 145 and 146: INDUSTRIAL GOLD USAGE Since the rep
Page 147 and 148: INDUSTRIAL GOLD USAGE IMITATION GOL
Page 149 and 150: MUMBAI GOLD PRICES Indian gold pric
Page 151 and 152: MUMBAI GOLD PRICES INDICATIVE DIFFE
Page 153 and 154: MONTHLY 2000 - 2001 2000 MUMBAI LON
Page 155 and 156: PRICING AND PROFITABILITY Bank impo
Page 157 and 158: Recycling of old gold scrap and bar
Page 159: JEWELLERY WHOLESALERS Jewellery who
Page 163 and 164: PRICING AND PROFITABILITY MINTED CO
Page 165 and 166: GOLD MINING AND EXPLORATION For 36
Page 167 and 168: Year Tonnes Year Tonnes 1970 3.241
Page 169 and 170: GOLD SUPPLY AND DEMAND Movements in
Page 171 and 172: GOLD SUPPLY AND DEMAND The trade at
Page 173 and 174: For the domestic market 1990 - 2001
Page 175 and 176: GOLD SUPPLY AND DEMAND INDICATIVE G
Page 177 and 178: GOLD SUPPLY AND DEMAND INDICATIVE A
Page 179 and 180: WORLD GOLD COUNCIL The World Gold C
Page 181 and 182: WORLD GOLD COUNCIL TRADITIONAL GOLD
Page 183 and 184: WORLD GOLD COUNCIL LOCAL FESTIVALS
Page 185 and 186: WORLD GOLD COUNCIL YOUNGER GENERATI
Page 187 and 188: Indian Overseas Bank Precious Metal
Page 189 and 190: REFINERS AND COIN FABRICATORS WEST
Page 191 and 192: BIBLIOGRAPHY Agricultural Statistic
Page 193 and 194: ABOUT GRENDON INTERNATIONAL RESEARC
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Indian Gold Book:Indian Gold Book - Gold Bars Worldwide

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