Digital Gold Advantage: Gold Casted Bars vs. Minted Bars and Coins

When investing in precious metals, it's essential to understand the differences between casted and minted gold bars and the cost implications of each. In this blog, we'll compare the overall costs, including making charges and GST, for both physical minted bars and digital gold. We'll also explore the reasons behind these charges and why digital gold offers a distinct advantage.

Minted Physical Bars: Cost Breakdown

Here’s a detailed breakdown of the costs associated with purchasing a 10 gram minted physical gold bar (the ones that can be purchased at a jeweller OR on an online marketplace for physical gold delivery):

• Charge per 10 gram, 24K / 99.99% purity: ₹85,380
  • Gold Purity Charge (10g, 24K): ₹77,929.60 (Based on eBullion's current price)
  • Making Charge (minted bar): ₹7,450.40 (9.56%)
• GST (3% on Total): ₹2,561.40
• Total Cost: ₹87,941.40

Gold Coin: Cost Breakdown

Here’s a detailed breakdown of the costs associated with purchasing a 10 gram minted gold coin (the ones that can be purchased at a jeweller OR on an online marketplace for physical gold delivery):

• Charge per 10 gram, 24K / 99.99% purity: ₹85,820
  • Gold Purity Charge (10g, 24K): ₹77,929.60 (Based on eBullion's current price)
  • Total Making Changes: ₹7,450.40 (10.13%)
    • Making Charges (minted bar): ₹7,450.40 (9.56%)
    • Making Charges (coin): ₹440 (0.57%)
• GST (3% on Total): ₹2,574.60
• Total Cost: ₹88,394.60

Digital Gold: Cost Breakdown

Investing in digital gold on eBullion offers a straightforward and cost-effective alternative:

• Gold Purity Charge (10g, 24K): ₹77,929.60
• Making Charge: ₹0
• GST (3% on Total): ₹2,337.88
• Total Cost: ₹80,267.48

So, with digital gold, you are saving approximately 9.56% in making charges and 10.13% if you are opting for physical coins on your gold purchase.

Understanding Making Charges

Making charges are the additional costs incurred when purchasing physical gold bars or coins, reflecting the processes involved in their production. For minted bars and coins, these charges are typically higher due to several factors:

1. Further Processing: Minted bars and coins undergo additional refining and shaping to achieve their precise dimensions and polished appearance. This process involves extra labor, machinery, and time, contributing to higher making charges.
2. Aesthetic Appeal: Minted bars and coins are often more aesthetically pleasing than casted bars, featuring intricate designs and brand engravings. The artistry and craftsmanship required add to the overall cost.
3. Packaging and Certification: Minted bars usually come in tamper-evident packaging with certificates of authenticity, ensuring their purity and weight. These measures provide added security but also increase production costs.

Advantages of Digital Gold

Investing in digital gold eliminates making charges, offering several benefits:

• Cost-Effective: As shown in the breakdown, digital gold has no making charges, making it a more economical choice.
• Convenience: Digital gold can be bought and sold easily online, without the need for physical storage.
• Security: Digital gold is securely stored and insured, providing peace of mind to investors.
• Liquidity: Digital gold offers high liquidity, allowing investors to quickly convert their holdings into cash when needed.

In conclusion, while minted bars come with added costs due to their processing and aesthetic value, digital gold provides a cost-effective and convenient alternative. By understanding these differences, investors can make informed decisions.