How To Calculate the Gold Price for Jewelry?

10 Oct 2024|

1 min read |

by ICICI Securities Team

Gold prices have increased considerably in the last couple of years. Today, if you go to a jeweler and ask the cost of a 10-gram jewelry, he will tell you a price over Rs 72,000. A few months back, the price was Rs 75,000. How do jewelers determine the jewelry price? We are sure you may want to know the answer to this question. Let us find out.

Factors that determine gold jewelry price

Let us look at the two parameters that determine the gold jewelry price:

Gold Purity: Gold is often measured in karats. 24-karat gold is considered pure gold, while 18-karat gold is 75% pure gold and 25% other metals (like silver or copper). You will also find 22-karat gold. The higher the karat, the higher the gold content and, consequently, the price.

Weight: The weight of the jewelry, measured in grams or milligrams, is another crucial factor. The heavier the jewelry, the higher the gold content and price.

To calculate the gold price for jewelry, you can use the below formula:

Gold Price = (Weight of Gold in Grams) x (Purity in Karats/24) x (Current Gold Rate per Gram)

Let us assume below numbers to understand the calculation:

Weight of gold jewelry: 10 grams

Purity: 18-karat (75% pure gold)

Current gold rate per gram: Rs 7,000

Gold Price = (10 grams) x (18/24) x 7,000 = Rs 52,500

Ideally, this should be the price. However, in most cases, you will get higher price because of below reasons:

Labor Costs/Making Charge: The cost of craftsmanship and labor involved in creating the jewelry can impact the final price. The making charge can be between 3% and 25%.

Design and Style: Intricate designs and unique styles can increase the jewelry price.

Hallmarking: Hallmarking is a certification process that ensures the purity of gold. Hallmarked jewelry generally commands a slightly higher price.

With the above information, the next time you visit a jewelry store, you should be able to determine the price of the jewelry even before the store representative shares the final price. Also, if you plan to put your gold jewelry as collateral for a gold loan, you can use the gold loan calculator & knowledge to figure out the worth of your jewelry.

Alternate Read: Gold Loan: How to Apply and Strategies to Avail Gold Loan

Disclaimer

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