So, how is the gold rate in Chennai decided?
The gold rate in Chennai is usually decided by jewellers Associations in the city. (Note: Buying hallmarked gold and demanding bills is something every gold buyer must insist on. Read why here.)
Some prominent gold jewellery chains though decide to go with their own rates, rather than that of Associations.
So, how are the rates decided?
One of the ways in which this gold rate is calculated is as follows:
The Indian Bullion and Jewellers Association (IBJA) that's almost 100 years old and based out of Mumbai puts out daily rates, twice a day - once in the morning and once in the evening - for gold of 999, 995 and 916 purity. These are the rates that even the Indian government follows to arrive at the price of the Sovereign Gold Bonds that they issue.
GST at 3% is then added to the calculation (an additional 5% GST has to be paid on making charges).
Additional costs incurred like transportation charges, the cost of security (guards) needed during this transportation and the cost of insurance are also then totted up.
On this gold rate, the jewellers based on demand and the headroom they have, decide whether or not to give a discount. If demand is high, usually they won't offer discounts on the base price unless they feel it could stoke further demand. But when demand is muted and when the gold in their books has piled up, they decide on a discount they feel won't impact their bottomline.
Note that jewellers have many ways in which to cover up this shortfall. (Read: A checklist for every gold buyer!)
Gold jewellery market in Chennai
The Chennai gold market is one of the biggest in India.
T Nagar, termed the golden corridor/golden zone, accounts for a significant share of the gold sold in Chennai.
An estimate made in 2015 suggested that T Nagar alone sells close to 17% - a mindboggling 150 tonnes that year - of the gold jewellery sold in all of India!
The two showrooms of the over 50 years old GR Thangamaligai (GRT) in T Nagar are stretched over 50000 square feet. In the retail hub of city, Kalyan Jewellery, meanwhile, runs what it terms the world's biggest gold jewellery showroom, spanning 40000 square feet.
At a walkable distance are also the biggest showrooms of Tanishq, Lalithaa Jewellery, NAC Jewellers, Malabar Gold, Prince Jewellery, the LKS Gold House, Sri Kumaran, Kerala Jewellers, Saravana Stores, Nalli Jewellers (a 30000 square feet showroom) and Joy Alukkas (another 30000 square feet showroom).
There are also other areas in Chennai like Velachery (recently turning increasingly popular), Mylapore, Adyar and Anna Nagar that host showrooms of leading gold jewellers, but T Nagar remains the undoubted epicentre.
The showrooms to buy gold from
If you intend to buy gold, make it a point to purchase it from one of the currently 198 (204-6) BIS hallmarked gold jewellery showrooms in Chennai. (Interesting tidbit: Did you know that there are an almost staggering 4-lakh-plus gold jewelers in India?)
Nathella Sampath Jewelry Pvt. Ltd. - the BIS hallmarked jeweller who has shut down
The minus six is because we have removed the six Nathella Sampath showrooms that have been shut down after a gold-saving scheme of theirs, like we had reported earlier, went bust.
Hall-marking centres in Chennai
Only 30% of the gold sold in India is hallmarked! As experts have noted there are shocking differences in purity and the average under-caratage is anywhere from 10-15%!
So, like we stressed earlier ensure the gold you buy in Chennai is hallmarked.
Hallmarking of gold in Chennai is currently done in 21 BIS hallmarking centres (with one-third of them being in T Nagar). In total, there are 54 BIS hallmarking centres across Tamil Nadu, second only to the 67 in Maharashtra.
Want to double-check your BIS-hallmarked gold in Chennai?
You can get your hallmarked jewellery tested at any of the 21 BIS recognized Assaying and Hallmarking Centres in Chennai. This testing will be done on priority but does involve your paying for the process. The Assaying and Hallmarking centre will then have to issue an Assay Report.
In case your jewel is found to be of lesser purity than what the BIS hallmark had promised, the testing charges paid by you will have to refunded by the hallmarking centre that had originally hallmarked the jewellery. The jeweller also will be forced to offer you a like-for-like replacement lives up to the hallmark, beside paying the due fine.
Popular gold ornaments in Chennai
According to a recent survey by the World Gold Council, bangles and chains are the most sought after and contribute between 30%-40% of the demand.
Necklaces contribute between 15-20% and rings - ear rings and finger rings - between 5-15%.
Biggest driver of gold jewellery demand in Chennai
The biggest driver of gold jewellery demand in Chennai remains bridal jewellery (50-55%).
Daily wear jewellery accounts for another 35%-40% of demand and Fashion jewellery 5-10%.
What Chennai's brides wear
If we were to go by a recent World Gold Council survey, beside the mangalsutra, these gold bangles are considered essential - the Muthu Valayal, Lakshmi Valayal and Kemu Valayal.
Among earrings it is the Kempu Kal Jhimkki that occupies pride of place. In necklaces the more famous ones are the Lakshmi Haram and Muthu Haram.
The ottiyanam, nethichutty and jadai billai are also considered essential as is the vella kal mookhuthi (nose ring).
When does Chennai buy its gold
The wedding season, and festivals - Akshaya Tritiya, Diwali/Dhanteras, Pongal, Tamil New Year and Makara Sankranthi are the big gold-buying occasions in Chennai.
Other popular occasions for buying gold are birthdays and anniversaries and gifting occasions.
Top gold jewellery showrooms in Chennai
Here are some of the more prominent gold jewellery showrooms in Chennai.
Lalithaa Jewellery has been around for more than three decades now.
They started the strategy of wooing customers by claiming to offer the lowest gold rate in Chennai thanks to their low wastage charges. And the jeweller does not levy making charges.
There is a wide variety of 916 BIS (Bureau of Indian Standards) Hallmarked gold jewellery on offer at their showrooms.
One can find wide range of jewels - from the antique to the trendy, from small rings and drops to grand harams and oddiyanams in their showroom.
Besides plain gold jewellery, Lalithaa offers Jewellery studded with Ruby, Emerald, Sapphire, etc. The company's website says stone charge is just Rs 199 per carat and the wastage is not more than 6%.
GRT is now more than five decades old, having come into existence in early 1960s.
It is a household name in Chennai, given the wide choice of gold jewellery designs on offer.
GRT has won scores of awards and accolades over the years, for having come out with some of the best designs in bridal category, necklace and ear-rings, besides being counted among the best in terms of customer service, trustworthiness and shopping ambience.
Kerala-headquartered Kalyan Jewellers, which has been in the business for 24 years, made a splash when it attracted Rs 1700 crore in investments in two rounds from US private equity firm, Warburg Pincus. This has helped it launch over 125 showrooms.
But its biggest gold jewellery showroom - what it terms the world's biggest gold jewellery showroom - spanning 40000 square feet is flush in the heart of T Nagar. It claimed to have 600 kgs of gold for customers at the time of launch.
Other Kalyan Jewellers stores can be found in Velachery, Adyar, Chromepet and Anna Nagar.
Joyalukkas is a well known name, not just in India, but in as many as ten other countries.
The group's entry into the jewellery trade dates back to mid-1950s, when Joy's father Varghese opened the company's first jewellery shop.
Joyalukkas has won several laurels in the Gulf as well, the most prominent one being the award of the Super-brand Status in the UAE not once, but for six years in succession.
Joy Alukkas has one of the world's largest gold jewellery showroom (spread over 30000 feet) in T Nagar, Chennai, besides a Diamond Cave.
Tanishq is a relative newcomer to the jewellery sector, having set up shop just eight years ago. But then, it has a fairly large presence in the country, having already set up over 180 exclusive showrooms across more than 100 cities.
Tanishq, from the House of Tatas, offers Bangles, Bracelets, Chains, Earrings, Necklaces, Nosepins, Pendant Earrings Set, Pendants, Rings, Wedding Collections, Shubham and Divyam Collections, Traditional and Modern Jewellery, Diamonds Jewellery, Gold Jewellery, Silver Jewellery, Gemstones, Diamond Rings, Diamond Set, Pearl,Polki, Gold Coins, Solitaire Jewellery and Bespoke Jewellery.
As the name suggests, Khazana is a treasure trove, with its showrooms displaying a wide range of exquisite gold, silver and diamond ornaments.
Khazana forayed into jewellery trade in the 1980s, and has spread its business to other cities.
Within four years of setting up its first shop in Chennai, at NSC Bose Road, Khazana opened a showroom in the upmarket Cathedral Road, where scores of prominent citizens reside, and then went on to open a shop in T Nagar, quite easily the jewellery nerve-centre of Chennai.
Khazana claims it is able to offer top service and quality jewellery at competitive price thanks to the manufacturing facilities the group owns.
The group's foray into jewellery business dates back to early 1930s with the family setting up shop inKottayam, Kerala.
It was in the year 1983, Prince Jewellery came into existence in Chennai.
Prince specialises in the latest variation of fashionable ornaments in gold, diamond, rubies, emeralds, silver, platinum jewellery and coloured gold.
The jeweller, which has spacious showrooms in Anna Salai, Cathedral Road and T Nagar, is among the trend-setters in design, and makes custom-made jewellery aswell.
It is the first to launch a lightweight jewellery collection in addition to jewellery for working women.
Vummidi Bangaru Jewellers
Known popularly as VBJ, the jeweller is in business for nearly 120 years now.
VBJ is managed by Vummidi Raghunath's sons, who are qualified gemologists from Belgium. The company, which has an ISO 9001 certification, offers besides gold, silver and platinum jewellery, diamonds and other gemstones.
Jeyachandran Gold House
The group forayed into jewellery business about twenty years ago, after having strengthened its foothold in textiles business earlier.
The group has big showrooms in T Nagar and Tambaram, and offers richly-crafted pure jewels at low price.
Other big names in the fray, include Nalli Jewellers (who also claim to have a 300000-feet showroom), Malabar Gold, NAC Jewellers, Saravana Stores Gold Palace, Sree Kumaran Thanga Maligai, Original Kerala Jewellers and Shree Gold.
Thousands of mid-sized and small jewellery shops are also thriving in the city where gold is not just a status symbol, but also an integral part of religious ceremonies and a good investment avenue.
Almost all the jewellery outlets in the city have savings schemes in place and also facilitate customers to buy jewels through installment schemes. Besides selling jewellery, most of the outlets sell Gift articles that are made of silver, pooja articles and so on.