Interesting Spectrum of Rates of Gold Coins across a few Banks Today

Retail and Small Investors need to feel and touch tangible Gold…They assign more safety to Tangible Gold than Exposure to Gold in other ways…Also they can commit smaller amounts to buy a few grams of Gold

So it was was with some interest and curiousity that I again reached out to a few Banks today to gauge what they had to Offer in Gold Coins…Check out the results below

GOLD COINS SOLD BY BANKS ON FRIDAY FEB 20,2009

 

Rate in Rs and inclusive of 1% Tax        NA: Not Available

Details of Purity and Motifs Stated

Coin Shape is Round, unless otherwise specific shape stated

 

Bank

 

 

2.5 gms

 

5 gms

 

8 gms

 

10 gms

 

20/50/100 gms

 

 

 

Union Bank

 

 

NA

 

8596

 

Bank Logo on Coin &

.995 Purity

 

13744

 

Bank Logo/God Motifs & .999 Purity

 

17192

 

Bank Logo/God Motifs & .999 Purity

 

 

 

NA

 

Bank of Baroda

 

 

NA

 

 

NA

 

14045

 

Bank Logo & .999 Purity

 

 

 

NA

 

 

NA

 

 

ICICI Bank

 

4894

 

Heart Shaped, .995 Purity

 

9468

9783 Combo

 

Bank Logo, Ganesh/Lakshmi

Combo Motifs &

.999 Purity

 

15020

 

Bank Logo/God Motifs & .999 Purity

 

 

NA

 

20 gms    :   37340

50 gms    :   92855

100 gms   : 184968

 

Bank Logo/God Motifs & .999 Purity

 

Clearly Union Bank is the Cheapest…In fact 8 gms category allows us to compare apple for apple…ICICI Bank has always been known to be more expensive than PSU Banks…their today’s rate for a .999 Pure Gold Coin of 8 gms is Rs 15020,that’s over 9% more expensive than the Rs 13744 quoted by Union Bank and just under 7% more or nearly Rs 1000 more than the Rs 14045 quoted by Bank of Baroda 

These Coins are Imported and the Surge in Gold Price and the 20 % Rupee Depreciation in 2008 has clearly impacted rates too

ICICI Bank has a wide variety of Coins available…It’s 5 gms Combo offer of God Ganesha and Goddess Lakhsmi Motifs ( Each a 2.5 gms coin in a single packing ) is a very popular purchase and the Bank prices it higher than a Plain 5 gm Gold Coin Offer 

The underlying Gold Price for .999 purity for 10 gms is Rs 15700 today…so even the Union Bank Offer today,the  cheapest of the three banks,of Rs 17192 is 10% higher

And if you dare to extrapolate the ICICI Bank rate of Rs 15020 for 8 gms and it’s  rate of Rs 37340 for 20 gms ,you will arrive at a computation of bewteen Rs 18750 to Rs 19000 for a 10 Gms Coin !….that’s 20% higher than the underlying !…Gosh !

You’re paying a high Premium when you buy Gold Coins from Banks…for surety of Gold Content,weight,purity and therefore better resale values

When you purchase Gold Coins from Jewellers,you get .995 purity…..but you run the risk of Gold Content not really being as stated….It has been reported that Gold Coins turn out to be actually Silver !…and many have some Iridium too !…so you may be paying for Gold,but getting shorted really ! so when you buy from Jewellers ,insist on a Bill and check that the Standard Gold Hallmark is there on the Coins…currently the Television Channels are running Government Ads to highlight this !

International Price of Gold is US $ 976/oz….Now this is a Troy Oz and is 31.1gms…A regular Oz is a weight measure for Food etc and is 28.35 gms…Thus for Gold this translates to Rs 15691 /Ten grams

So if US  $ 976/oz moves towards US $ 2000/oz in the next Two Years,then a 10 Gm Gold Coin of .999 Purity will cost past Rs 30000 ! (assuming exchange rate remains constant)…that’s a 100% surge from Now

Think about It ! 

5 thoughts on “Interesting Spectrum of Rates of Gold Coins across a few Banks Today

  1. when you quote prices of gold in Oz, it usually means Troy ounce, which is equal to approx 31.1 grams and not ordinary Oz which is approx 28 gms as you have written. That would reduce the considerable arbitrage which you have shown in your calculation between Indian Gold and international gold.

  2. You’re abs right…I had checked it out earlier but inadvertently forgot to rectify…Gold is in Troy Oz and which is 31.1 gms while generally Oz indicates weight for Food etc and is @ 28.35 gms…..For Gold we have to take the conversion base as 31.1 and which will lead to the Price of Rs 15691 for Rs 10 gms

  3. Hi Shiva,

    Thi blog is just to show the high premium you will pay if you buy Gold from Banks..It will ensure you get .999 Purity….Otherwise you risk being duped if you buy from Private Jewellers…Banks set the rates daily based on the fluctuating International Price of Gold…You can check the daily Financial Newspapers for the Indicative Price of Gold for the day

  4. Hi, this is a good article I have found today. I am doing bit research on Gold Coin prices in INdia and I found that Corporation Bank is the cheapest and HDFC Bank is the costliest.

    Thanks
    Veera

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