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How gold jewellery price is calculated: Buying gold jewellery on wedding occasions or auspicious festivals has been a trend in every Indian household for years. With time, the price of gold is also increasing. However, after the Union Budget presented in the month of July, people are once again showing enthusiasm in buying gold.
Now the question is, when you go to a jeweler in the city to buy gold jewellery, how much does he ask you to pay? Actually, it is important to understand the calculations related to gold jewellery. In this article, we will give you a clear understanding of this with an example.
The purity of gold is measured in carats
The purity of gold is measured in carats. The purest gold is considered to be 24KT. However, the point to note here is that gold jewellery can never be made from pure gold. 24KT gold has a low density. Gold jewellery can only be made from 22K, 18K and 14K purity gold. As the carat number decreases, so does the price. The price of 24KT gold is much higher than 14K.
- 24 carat gold does not contain any alloys
- 22 carat gold contains 22 parts gold and 2 parts other metals.
- 18 carat gold contains 75 percent gold and 25 percent other metals.
- 14 karat gold contains 58.5 percent gold and 41.7 percent other metals.
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The final price of gold jewellery is calculated based on the price of gold per gram, making charges and 3 gram GST.
Final price of gold jewellery = Price of gold + Making charges + Hallmarking charges + 3% GST
For example, suppose a customer wants to buy a 22 carat gold chain weighing 11 grams. Where, the price of 22 carat gold is Rs 67858/ per 10 grams. The jeweler charges Rs 500 making charge and Rs 45 hallmarking charge per gram of gold. In such a situation, the final price of this chain will be determined as follows-
- Price of gold = Rs 74,636 (Rs 6785 per gram X 11 grams)
- Making charge = Rs 5,500 (500 X 11 grams)
- GST = Rs 2,404 (3 per cent on Rs 74,636 + Rs 5,500 = Rs 80,136)
- Hallmarking- Rs 45
- Final bill = Rs 82,585
It is also important to note that whenever a customer goes to buy diamond jewellery with gold, 22K purity gold is not used with diamonds. 22K gold is too light and soft to hold diamonds. Hence only 18K or 14K gold is used for diamond jewellery.