Hallmarking is the determination and recording of the proportion of precious metal content in an artefact or piece of jewellery
If the ongoing pandemic is making you double down on investments in precious metals, there’s some good news for you. Last year, the government had issued an order stating that only gold and silver jewellery and artefacts that are hallmarked can be sold from January 1, 2021. After being postponed, this rule is now to set come into effect from June 1.
What is it?
Hallmarking is the determination and recording of the proportion of precious metal content in an artefact or piece of jewellery. The hallmark measures and tells you the extent of actual gold or silver content that is present in an article that you’re buying. This is done in Assaying and Hallmarking (A&H) centres which are present across the country. The jeweller seeking to hallmark his wares submits them to A&H centres where the testing is done. If found to meet the requirements of the standard, a hallmark symbol is applied.
In India, the hallmark symbol will certify the purity and fineness of precious metal articles in accordance with standards set by the Bureau of Indian Standards (BIS), which is the national quality-setting body. The Indian standard specifies three grades for hallmarking of gold jewellery and artefacts — 14 Carat (K), 18 Carat and 22 Carat. And it specifies six grades for hallmarking of silver jewellery and artefacts — 990, 970, 925, 900, 835 and 800. For hallmarking of gold bullion and coins, a refinery or a mint needs to obtain a licence.
Why is it important?
Although gold and silver can be bought in several ways, in India, jewellery is the most common way of buying these precious metals. Indians are estimated to own over 25,000 tonnes of gold. But the actual worth of all this wealth locked up in gold is uncertain as jewellery purchases in India have traditionally been beset by low caratage. When the new regulations kick in, this will change as jewellers will be mandated to sell only hallmarked jewellery. If you buy gold or silver jewellery or artefacts with the BIS mark, you can be sure of the stated caratage.
The hallmark consists of four components for gold: purity, fineness, assaying centre’s identification mark and jeweller’s identification mark. Purity and fineness are represented through a symbol that combines cartage and purity. For instance, the symbol 22K916 means that the item is made of 22 carat gold and 91.6 grams of gold per 100 grams of jewellery. However, the jewellery or artefacts you buy are seldom made of 24 carat gold. This is because 24 carat gold is too malleable to be converted to jewellery; copper or silver are usually alloyed with it to craft jewellery or artefacts, making 22 carat or 18 carat the normal standard of purity for such items.
For silver, the hallmark consists of three components — fineness, assaying centre’s identification mark and jeweller’s identification mark. If the fineness is 990, it indicates that the item has 99 gm of silver per 100 gm of the jewellery.
Why should I care?
With hallmarking being optional currently, jewellers and vendors of artefacts adopt it selectively. Only 40 per cent of the jewellery sold in India is estimated to be hallmarked currently. This has paved the way for jewellers passing off lower quality 18K gold as 22K gold. This comes back to bite you as you try to exchange old gold for new or to monetise your physical bullion holdings.
Come June 1, 2021, the caratage issues associated with jewellery may abate as hallmarking becomes mandatory. If you are unsure of the purity, jewellery can be tested at any A&H centre where testing will be undertaken, and a report issued. In case hallmarked jewellery is found to be of lesser purity, the testing charges will be refunded, and the jeweller is obliged to replace the item.
The bottomline
Without hallmarking, all that glitters is literally not gold.