As gold prices continue to rise, consumer choice and affordability are at the heart of the Bureau of Indian Standards' (BIS) decision to include 9 karat gold under mandatory hallmarking, said Surendra Mehta, Secretary of the India Bullion & Jewellers Association (IBJA), in an interview with CNBC-TV18.

“This is an option given to both jewellers and consumers,” Mehta said, adding that the relaxation in karat restrictions is aimed at empowering the market, especially in the face of surging prices.

BIS had previously not allowed the manufacture of jewellery below 14 karat, but under the new rules set to take effect in July 2025, jewellers can now produce 9 karat gold jewellery. With gold prices nearly doubling over the past few years, 9 karat jewellery is being seen as a cost-effective alternative for price-conscious buyers.

Mehta noted that the move could also help reduce malpractice in rural markets. “A lot of jewellers in rural areas have been misleading customers by selling jewellery below 14 karat without hallmarking. We’ve received many complaints about this,” he said.

He believes younger, urban consumers may also turn to 9 karat gold—not for investment, but as an affordable fashion choice. “If the market for 9 karat evolves, jewellers will manufacture it. If not, they won’t. But at least the option now exists.”

On the industry’s concern around coin manufacturing, Mehta clarified that there is no major change. “Coins can now be made by mints and refiners without the need for hallmarking. But if made by jewellers, they must be hallmarked,” he said. Jewellers, who typically manufacture 995 purity coins, can continue to do so—they just need to ensure proper hallmarking.

The IBJA is also pushing for hallmarking of bullion. A steering committee has submitted its recommendations to BIS, proposing that mandatory hallmarking begin with bullion above 100 grams, and gradually cover smaller quantities down to 5 grams. “If you bring jewellery above two grams under mandatory hallmarking, then why not bullion?” Mehta questioned.

On the outlook for gold prices, Mehta maintained his earlier projection of consolidation between $3,200 and $3,450 per ounce. However, he now sees further upside. “There is a technical pattern forming that could take gold to the $3,800 level,” he said, citing expectations of US Fed rate cuts, continued geopolitical tensions, and strong central bank buying—particularly by China.

Courtesy: Cnbc TV 18