Gold and Silver Inventory: Purity, Weight, and Stock Control

Tracking gold and silver inventory is fundamentally different from tracking any other kind of stock. The same metal can exist in multiple purities, multiple weight units, and multiple physical forms, and each of these dimensions changes the value of what you hold.

A generic stock management or accounting tool that works well for electronics or garments fails completely for bullion. This guide explains how Indian bullion traders manage inventory correctly, and what makes it complex enough to warrant a dedicated solution.

The Three Dimensions of Bullion Inventory

Every piece of gold or silver you hold can be described along three dimensions:

1. Metal: Gold or Silver
2. Purity: The fineness of the metal, expressed as parts per thousand or as a karat value
3. Form: The physical shape of the metal, such as bar, coin, loose metal, or jewellery-grade

Your inventory system must track all three separately. You cannot net 995 gold against 999 gold; they are different assets with different values. Mixing them in a single stock balance is a reporting error.

Gold Purity Standards Used in Indian Bullion Markets

For silver, the standard purity grade is 999. Your inventory system must track whichever grades your business handles.

Weight Units in Indian Bullion Trading

Weight tracking is critical for Indian bullion traders, with two primary units used depending on the trade size:

• Gram (g): The standard modern unit. Most digital systems and day-to-day entries use grams.
• Kilogram (kg): Used for large wholesale bar trades, where 1 kg = 1000 grams.

The Inventory Ledger: What Gets Recorded

A proper bullion inventory ledger tracks the following movements for each metal-purity combination:

• Opening stock: Quantity on hand at start of day or period
• Stock IN: Metal received through purchases, refinery outputs, and transfers in
• Stock OUT: Metal dispatched through sales, transfers out, and refinery inward
• Closing stock: Opening + Stock IN − Stock OUT = Closing quantity

Each Stock IN and Stock OUT entry links back to the specific transaction in your Daily Ledger. This is how you reconcile book stock with physical stock, ensuring every movement has a source document.

Physical vs Book Stock Reconciliation

One of the most important (and most neglected) practices in bullion trading is periodic physical stock count. Your book stock (what the ledger says you hold) must match your physical stock (what is actually in the safe or vault).

Discrepancies arise from:

• Transactions recorded at incorrect weight
• Purity grade recorded incorrectly (995 entered as 999)
• Unrecorded Stock IN
• Stock OUT dispatched but not yet entered in the system
• Assay or testing loss not recorded
• Refinery processing loss (toofan/wastage) not accounted for

Disciplined bullion businesses do a physical count at the end of every trading day. When physical and book match, the ledger is clean. Any discrepancy must be investigated and reconciled before the next trading session opens.

Opening Stock for a New Business or New System

When setting up a digital inventory system for the first time, you must enter your opening stock accurately. This means conducting a full physical count, purity by purity, and entering each holding:

• Gold 999: X grams
• Gold 995: Y grams
• Silver 999: Z grams

This opening stock becomes the baseline. All subsequent Stock IN and Stock OUT build on top of it. An inaccurate opening stock means every closing balance from that point forward is wrong.

How Bullion Master Handles Inventory

Bullion Master's Inventory module tracks gold and silver stock by purity and form. Every sale and purchase entry from the Daily Ledger updates the inventory automatically, so you never enter the same transaction twice. At any time, you can see your current stock position in grams or kg, broken down by purity.

The module supports opening stock entry at setup and allows you to run a stock reconciliation report that compares your book stock against your manual physical count input, showing you any gaps that need investigation.