What is 875 Gold? A Comprehensive Guide

When you visit a jewellery shop, there is a high chance you might have spotted numbers like 875 or 916 on a piece of gold jewellery or heard people talk about it, and wondered what it signifies. Each gold piece has a purity level and the numbers are indicators of that. The 875 stamp is a code that indicates its purity, meaning that the gold piece is 21 Karats, or 87.5% pure gold. It helps to know details about gold purity while buying jewellery, investing, or applying for a gold loan so you know the true market value, resale potential, and your loan eligibility. This blog talks more about the alloy composition in 875 gold, its Karat equivalence, hallmarking, how it differs from other variants, and more.

What is 875 Gold?

875 gold indicates 875 parts out of every thousand parts are pure gold, which is why it is written as 87.5% pure gold. The remaining 12.5% consists of alloy metals like silver, copper, or zinc. These alloys are added to harden gold because 24K gold is soft and prone to scratches and bending, making it unsuitable for intricate daily wear. This is exactly why 875 gold purity is a popular choice as it provides the necessary strength, durability, and a balance of rich colour.

When applying for a loan against your jewellery, understanding what 875 gold means is vital for accurate valuation. Lenders recognise this hallmark as a certified quality standard, ensuring the gold is genuine. While it qualifies for gold loans, the sanctioned amount is calculated specifically on the 87.5% pure gold content. Consequently, while it offers high liquidity, the loan value per gram might be lesser than 22K or 24K counterparts due to this specific purity level.

Understanding 875 Gold Purity and Carat Value

Purity of any gold piece is estimated using the karat system, which is based on a 24-part scale. When 24K is mentioned, it means that the gold is 100% pure and in its natural form. Then 875 gold is how many carats? The 875 mark translates to 21 Karats, which means that it is 87.5%.It lies between 22k (91.6% purity) famous for its deep yellow shine and 18K (75% purity) that’s valued for its durability. 875 gold purity strikes the perfect balance due to its durability and high market value.

The Karat value is the primary metric of valuation for lenders that they use to determine gold loan eligibility. It is the number used to calculate the exact weight of pure gold, excluding the weight of the alloy portion in it. The loan value per gram of 21K will naturally be less because of its lower percentage of gold than 22K. Understanding this carat-to-purity relation helps borrowers predict a fair loan amount.

Gold Alloy Composition in 875 Gold

The term 875 gold purity comes because it has only 87.5% of pure gold and the other 12.5% comprises other base metals like silver, copper, zinc, or a mix. The chosen alloy has an impact on the final look; e.g.: a higher percentage of copper brings out a warmer, reddish rosy tint and silver helps retain the bright yellow finish.These metals are not added for looks, more for functionality of making the naturally soft gold stronger and durable. This makes 875 gold perfect for designs with added gemstones and daily wear. On the other hand, 24K gold would be too delicate, easily bendable and prone to scratches.

Even though these alloys increase the overall hardness and weight of the piece, they do not contribute to the metal's financial value. When you pledge your jewellery for a gold loan, the lender performs a purity test and only the pure gold portion’s weight is considered. Since the valuation is strictly based on the 87.5% pure gold portion, knowing your alloy composition helps you understand why the total scale weight of your jewellery differs from its "valuation weight" during the loan process.

875 Hallmark Gold – How to Identify It

The 875 hallmark gold stamp refers to gold with 87.5% purity that has been certified by the Bureau of Indian Standards (BIS), meaning it meets the national quality standards. This certification of authentication is necessary in maintaining transparency and trust, as it guarantees the buyer receives accurately measured gold and eliminates concerns about adulteration. By choosing 875 hallmark gold, you get surety about both its purchase value and future transactions (borrowing or resale).

To identify genuine 875 hallmark gold, look for the following components typically laser-etched on the item:

• BIS Logo, which is the official seal of the Bureau of Indian Standards
• Purity Mark (875) indicates that the piece contains 875 parts of pure gold in every 1,000 parts
• A unique mark or logo identifying the registered jeweller
• A unique 6-digit alphanumeric HUID (Hallmark Unique Identification) code

Hallmarking is also useful for gold loan borrowers. Because hallmarked gold is significantly easier to verify, lenders can process applications much quicker. It provides a transparent basis for valuation, protecting you from fraud and often leading to better resale value due to the certified quality of the 875 gold purity.

875 Gold Price in India – How Is It Calculated?

The price of 875 gold is derived directly from the current market rate of 24K pure gold. Since 875 gold contains exactly 87.5% pure gold, its value is calculated by applying this percentage to the current 24K rate. It is important to note that while the market price fluctuates daily based on global trends and local demand, the purity ratio remains constant. For jewellery purchases, additional costs such as making charges (labour), wastage, and GST (typically 3%) are added to this base value.

Calculation Example

If the current market rate for 24K gold is ₹15,660 per gram, the price for 875 gold would be determined as follows:

• 24K Gold Rate: ₹15,660
• Purity Factor: 87.5% (or 0.875)

875 Gold Price per Gram: ₹15,660 x 0.875 = ₹13,702.50

It’s better for potential borrowers to know how much 875 gold is worth before approaching a lender. Gold loan amounts are also strictly linked to the intrinsic value of the pure gold content. By calculating this value beforehand, you can estimate your maximum loan eligibility and ensure the lender's sanctioned amount aligns with current market standards.

How Much is 875 Gold Worth for a Gold Loan?

The valuation of 875 gold for a loan is a process lenders use to calculate the "actual" gold value by assessing purity, net weight, and current market rates. To determine how much 875 gold is worth, appraisers first subtract the weight of any stones, beads, or non-gold fastenings. The remaining net weight is then multiplied by the 21-karat gold rate. Lenders often use the previous day’s closing rate from the India Bullion and Jewellers Association (IBJA) to ensure fairness.

A critical factor in your gold loan amount is the Loan-to-Value (LTV) ratio. Under current RBI guidelines for 2026, the LTV ratio is tiered based on the loan amount:

• Up to ₹2.5 Lakh: Up to 85%
• ₹2.5 Lakh to ₹5 Lakh: Capped at 80%
• Above ₹5 Lakh: Capped at 75%

While 875 gold purity (21K) is slightly lower than 22K (916), it remains a premium asset. You will receive a higher loan amount compared to 18K gold, but the per-gram rate will be lower than that of 22K gold due to the difference in intrinsic gold content. There are more benefits of pledging 875 Gold for loans:

• Almost all banks and NBFCs accept 875 gold as a high-quality collateral
• With 87.5% pure gold content, the value remains resilient against minor market fluctuations
• 875 gold price is comparatively high, making it ideal for meeting sudden expenses like medical bills or education fees
• Modern testing methods like X-Ray Fluorescence (XRF) Spectrometers are used ensure your jewellery is valued accurately without damage

Difference Between 875 Gold and Other Gold Purities

When you’re choosing gold jewellery, it is always good to know the differences between the various gold purity options in the market. 24K is pure gold but its soft nature makes it impractical for daily wear. This is why, many actually prefer 22K (916), 21K (875), and 18K (750).

875 gold becomes the popular choice here because it offers more durability than 22K that makes it suitable for daily wear, and also has more gold purity and value than 18K. The below table compares all 3 variants against common criteria:

The difference of purity between these variants are an important factor of influence in how much you can borrow; the net weight of pure gold in a piece being a huge deciding factor. This means that 22K gets the highest value per gram. Even so, 875 gold purity can be in the premium category and qualifies for the maximum tiered LTV ratios of up to 75%. The lenders view it as a lower-risk collateral due to its fairly significant value.