Indian people love buying gold in the form of designer jewellery or coins for propitious reasons around special festivals as well as for investments. You may get gold funds at the same cost across the same platform throughout the country, but you will not get gold ornaments at the same price. This is because there is no standard rule for pricing and invoicing gold jewellery nationwide. The billing system varies from one jeweller to another.
Usually, every city has its own gold jewellers association, and these associations declare the live gold rate every morning. And This is why the gold prices are different, even in each town. You should also know that several factors affect the final amount you pay, such as the gold rate, making charges, the value of gems, taxes, etc. So how do jewellers fix gold jewellery prices, and how to make sure they are not cheating you? Let us find out how to calculate the gold price for jewellery.
The final price of any gold jewellery piece is based upon the below formula:
Final Jewellery Price = Price of (24 Karat 22 Karat or 18 Karat) gold per gram X (Weight of Gold to be bought in grams) + Jeweller’s Making charges + GST at 3% on (Jewellery Price + making charges)
Tips to Calculate Gold Price for jewellery:
Calculating the price of gold jewellery involves several factors, including the current market price of gold, the weight of the jewellery, and the purity of the gold used in the jewellery. Here are the steps to follow to calculate the gold price for jewellery:
- Determine the purity of the gold: The purity of gold is measured in karats. The karat rating of the gold will be stamped on the jewellery. Pure gold is 24 karats, but gold used in jewellery is usually 22 karats, 18 karats, or 14 karats.
- Weigh the jewellery: You’ll need to weigh the jewellery in grams.
- Look up the current market price of gold: The current market price fluctuates daily, so it’s important to look up the current price to get an accurate estimate.
- Calculate the gold content of the jewellery: To do this, multiply the weight of the jewellery by the percentage of pure gold it contains. For example, if the jewellery is 18 karats (which means it’s 75% pure gold) and weighs 10 grams, you would calculate the gold content as 10 x 0.75 = 7.5 grams of pure gold.
- Calculate the value of the gold content: To do this, multiply the weight of the pure gold by the current market price of gold. For example, if the current market price of gold is rs50 per gram and the jewellery contains 7.5 grams of pure gold, the value of the gold content would be 7.5 x rs50 = rs375.
Add any additional costs: The final price of the jewellery will include any additional costs for labor, design, and other materials used in the jewellery.
It’s important to note that the price of gold jewellery can vary widely depending on the design, craftsmanship, and rarity of the piece and the jeweler’s reputation. Let’s understand this calculation through an easy example so that you get some more idea:
Suppose you wish to buy a 22 karat gold chain weight 10.5 grams and the price of 22 Karat Gold listed by the jeweler on that day is Rupees 43,000 per 10 grams and the jeweler’s making charges are 15%; then the final jewellery price will be calculated as below:
- Price of 10 grams of 22 Karat Gold = Rs. 43,000
- Price of 1 gram of 22 Karat Gold = Rs. 43,000/10 = Rs. 4,300
- Price of 10.5 grams of 22 Karat Gold Chain = Rs. 4,300 * 10.5 = Rs. 45,150
- Making charges = 15% of Rs. 45,150 = Rs. 6,772
- So, the total value of gold chain excluding tax = Rs. 45,150 + Rs. 6,772 = Rs. 51,922
- GST @ 3% on the total price = 3% of Rs. 51,922 = Rs. 1,558
And, finally the total price with tax becomes = Rs. 51,922 + Rs. 1,558 = Rs. 53,480
So, the final bill amount of your gold chain is Rs. 53,480
Moreover, there are certain things you should be aware of while buying gold to avoid being tricked. While buying any gold jewellery item studded with artificial diamonds or semi-precious stones, make sure that the value of gold in the piece is calculated based on the entire weight of that jewellery minus the weight of those studded diamonds or gemstones. The cost of diamonds and gemstones must be added separately.
Also, other factors like making charges or wastage charges may vary from one jeweller to the other. Hence, you must check these charges and other things before buying. To know more about these things to check before buying gold jewellery, look at our article on the same topic. Also, if you like, you can explore our collection of gold coins online and invest in this yellow metal in its pure form.