Why Gold Purity Testing is Non-Negotiable
Gold purity testing is the single most critical step in the gold loan process. Accepting gold at 22K purity when it is actually 18K — or worse, accepting gold-plated items — is a direct financial loss. A pawn broker who loans ₹50,000 against gold that is actually worth ₹30,000 is exposed to a ₹20,000 shortfall if the customer defaults.
Every pawn broker must test every piece of gold before every pledge — no exceptions, no matter how trusted the customer or how time-pressured the situation. The cost of testing equipment is trivial compared to the risk of accepting impure gold.
Method 1 — Acid Test
The acid test is the most widely used purity testing method among small and medium pawn brokers in India. It uses nitric acid and a touchstone to chemically verify the gold content of a piece of jewellery.
| Aspect | Details |
|---|---|
| How it works | A small streak of the gold is made on a touchstone. Acid is applied to the streak and the colour reaction indicates purity. |
| Cost | ₹2,000–₹5,000 for a complete acid test kit (multiple acid strengths for different karats) |
| Accuracy | Good — within ±1 karat if done correctly |
| Time per test | 2–5 minutes |
| Pros | Low cost, widely understood, good for distinguishing 22K from 18K |
| Cons | Slightly damages surface, subjective colour reading, less precise for unusual alloys |
Method 2 — Touchstone Test
The touchstone test (or streaking test) is a quick initial screening method. The gold is rubbed against a black touchstone and compared to reference marks of known karat gold. This is used as a first-pass check before more detailed testing.
| Aspect | Details |
|---|---|
| How it works | Gold is streaked on the stone and colour compared to reference alloys |
| Cost | ₹500–₹1,500 for touchstone + comparison set |
| Accuracy | Moderate — good for experienced users, easily fooled by gold-plated alloys |
| Time per test | 30–60 seconds |
| Best use | Initial screening before acid test; experienced pawn brokers only |
Method 3 — XRF Machine (X-Ray Fluorescence)
XRF (X-ray Fluorescence) is the most accurate, non-destructive method for gold purity testing. An XRF machine emits X-rays that cause the gold's atoms to fluoresce, and the machine analyses the resulting spectrum to determine exact elemental composition to high precision.
| Aspect | Details |
|---|---|
| How it works | Gold placed in machine; X-rays fired; spectral analysis determines exact composition in seconds |
| Cost | ₹1.5–₹3 lakh for a professional gold testing XRF machine |
| Accuracy | Very high — ±0.1% or better; detects exact alloy composition |
| Time per test | 10–30 seconds |
| Non-destructive | Yes — no surface damage to jewellery |
| Best for | High-volume operations (20+ pledges/day), loans above ₹50,000, detecting surface-plated items |
XRF pays for itself in 6–12 months
At ₹2 lakh cost for an XRF machine, even one prevented fraud case (accepting ₹50,000 loan on 18K plated item instead of pure 22K) pays for a significant portion of the machine. For pawn brokers processing more than 20 pledges per day, XRF is essential.
Method 4 — BIS Hallmark Verification
Since September 2021, BIS (Bureau of Indian Standards) hallmarking is mandatory for all gold jewellery sold by jewellers in India above 2 grams. Hallmarked jewellery carries a 6-digit alphanumeric HUID (Hallmark Unique ID) that can be verified on the BIS Care app.
| Aspect | Details |
|---|---|
| How to verify | Scan HUID from hallmark using BIS Care app — shows registered purity and jeweller details |
| Cost | Free (BIS Care app) |
| Accuracy | High for recently purchased, genuine hallmarked jewellery |
| Limitation | Does not apply to older jewellery, imported pieces, or jewellery purchased before Sep 2021 |
| Best use | Quick verification for recently purchased hallmarked jewellery as a first check; always supplement with physical testing |
Which Method to Use?
- Small pawn shop (under 15 pledges/day) — Acid test kit as primary method; touchstone for quick screening
- Medium pawn shop (15–30 pledges/day) — Acid test for standard pledges; XRF for pledges above ₹50,000
- High-volume operation (30+ pledges/day) — XRF machine for all pledges; fastest and most consistent at scale
- Any operation — Always verify BIS hallmark on recently purchased jewellery using the BIS Care app as a first step
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