How to Calculate the Price of Your Gold Jewellery

In India, gold has always been more than just a symbol of wealth, it’s a trusted investment and a safety net for uncertain times. Whether you purchase it for weddings, savings, or long-term returns, knowing how to calculate gold jewellery price is essential. Many buyers overlook this step, but understanding it helps ensure you get the right value for every gram you buy or sell.

Interestingly, when you visit different jewellers, you’ll notice varying prices for seemingly similar ornaments. While the base gold rate is standardized across the country, other factors like purity, weight, making charges, and taxes affect the final price. Hence, before you invest, it’s important to learn how to calculate gold jewellery price accurately, helping you make an informed and fair purchase.

Gold traders and retailers operate per the daily price set by the local Gold Jeweller’s Association every morning. This is why each town and city across India has some price differences, even for the same weight of gold jewellery. Several factors affect the final price of jewellery items that you purchase. These factors include:

• Rate of gold
• Modifications to the gold
• Gemstone value
• Taxes involved

Formula to Calculate Gold Jewellery Price

Final Price Of A Gold Item = Price of gold per gram (of purity between 18-24 karat) X (The gold weight you purchase in grams) + Making charges of jeweller + GST of 3% on (Jewellery Cost + Making charge)

Understanding Purity & Karat System in Gold Jewellery

Gold purity is the foundation of accurate pricing. The purity of gold is measured in karats (K), with 24K being 99.9% pure which is ideal for investment but too soft for regular wear. Jewellery is usually made in 22K (91.6%), 18K (75%), or 14K (58.3%) varieties, where pure gold is alloyed with metals like silver or copper for durability. To calculate gold jewellery price, you must first identify its purity using hallmark certification. Multiply the current market rate of gold (for that karat) by the weight in grams. This gives you the base gold value before adding making charges and GST.

Step-by-Step Guide to Calculate Jewellery Price

Let’s consider you want to purchase a 10.5-gram gold chain of 22 karat purity. The jeweller you choose lists the price for 10 grams of gold on a specific day at Rs. 43,000. The making charges stand at 15 per cent of the listed price. Therefore, the final price you must pay for the gold chain will stand calculated as under:

Price for 10 grams 22 Karat gold = Rs. 43,000
Price for 1 gram 22 Karat Gold = Rs. 43,000/10 = Rs. 4,300
Price for 10.5 grams of 22 Karat Chain = Rs. 4,300 * 10.5 = Rs. 45,150
Making charges added = 15% of Rs. 45,150 = Rs. 6,772

Therefore, the final value of this gold chain excluding all taxes = Rs. 45,150 + Rs. 6,772 = Rs. 51,922

When you apply GST @ 3% on this total price, you get 3% of Rs. 51,922 = Rs. 1,558
Finally, the chain’s total price with tax added is Rs. 51,922 + Rs. 1,558 = Rs. 53,480

Therefore, you need to pay Rs. 53,480 for this jewellery purchase.

How Making Charges Affect Your Gold Jewellery Price

Making charges are the cost of designing, crafting, and finishing your gold piece. They vary based on the complexity of design and can significantly impact how you calculate gold jewellery price. Jewellers either charge a fixed rate per gram or a percentage of the gold value usually ranging from 6% to 25%. For machine-made jewellery, the charge is lower, while intricate handcrafted pieces cost more. To calculate the final price, add the making charge to the base gold value and then apply 3% GST on the total. Understanding this component ensures transparency and prevents overpaying for craftsmanship.

Important Tips for Accurate Gold Jewellery Calculation

There are a few things that you must consider when buying gold.

1. When you purchase any gold jewellery studded with precious or semi-precious stones, make a special note that the gold value stand calculated will be as per the jewellery weight MINUS the weight of all the stones studded in it. The gemstone costs get added separately.

2. Making charges vary from jeweller to jeweller. You must keep track of the same when finalizing the price of gold jewellery.

3. Jewellery is available in the purity of up to 22 karat gold. When you have gold jewellery sourced from a reliable source, you can readily obtain gold loans from NBFCs such as IIFL Finance.

Differentiating Between Gold Jewellery With and Without Stones

When performing gold jewellery calculation, it’s crucial to distinguish between ornaments made entirely of gold and those with gemstones or enamel work. Jewellers typically include the total weight (gold + stones) in the bill, but gold is charged only for its net weight. Stones like diamonds or emeralds have separate valuations based on cut, clarity, and carat. Always request the net gold weight before making a purchase or pledge to ensure accurate pricing. A correct gold jewellery calculation means isolating the stone weight and applying the gold rate only on the metal portion.

Get A Gold Loan With IIFL Finance

Minimal documentation, quick disbursal times and hassle-free processing of gold loans from IIFL can save you from cash crunches in future. As one of India's quickest disbursers of gold loans, IIFL Finance provides gold loan interest rates as low as 0.83% per cent per month and offers a minimum loan amount of INR 3000. Reach out to us to avail your gold loan or visit us at the nearest branch in Mumbai.