Gold is a precious metal that has been used for thousands of years in jewellery, coins and other forms of currency. Gold is also one of the most popular metals used in making rings, necklaces, bracelets, earrings, pendants, anklets, chains, etc. The demand for gold jewellery continues to grow as people become more aware of its beauty and value.
The cost of buying gold jewellery can vary greatly depending on the type of jewellery you are looking at purchasing. There are many factors that go into determining the price of any piece of gold jewellery, including:
- Purity of gold will determine how much it costs gold, how easy it would be to melt down the gold and what kind of workmanship goes into creating the piece.
- The size of the piece. Large pieces of jewellery such as necklaces, bracelets and rings have more value than small ones like earrings or nose pins.
- A heavier the piece, the higher the price.
- The design of the piece. A simple band ring may only cost Rs. 7500 while a custom-made diamond ring could cost over Rs 35,000 to 70,000 rupees approx price option.
All of the above are some of the factors that can affect the price of your jewellery. But how do jewellers actually charge their customers for final gold jewellery?
In this article, we’ll look at how jewellers set prices over gold jewellery.
How The Price Of Gold Jewellery Is Calculated By Jewellers?
Every city has its own association of gold jewellers. And everyday morning, they publish the gold rate and that’s why gold prices aren’t the same from town to town. Generally, jewellers calculate the price of jewellery by the price of gold as per purity, making charge, the weight of gold and GST. Below is the formula for calculating the final price of jewellery;
|Final price of GOLD jewellery
|= Price of (24 Karat, 22 Karat, or 18 Karat) gold per gram
|* (Weight of Gold to be bought in grams)
|+ Jeweller’s Making charges
|+ GST at 3% on (Jewellery Price + making charges)
To give you a better understanding, let’s use an example to illustrate this calculation:
For example, suppose you wish to purchase a 22 karat gold chain weighing 10.5 grams, and the price of 22 karat gold listed by the jeweller on that day is Rs. 46,650 per 10 grams with a 15% service charge; then the final jewellery price will be calculated as follows:
- Price of 10 grams of 22 Karat Gold = Rs. 46,650
- Price of 1 gram of 22 Karat Gold = Rs. 46,650/10 = Rs. 4,665
- Price of 10.5 grams of 22 Karat Gold Chain = Rs. 4,665 * 10.5 = Rs. 48,982
- Making charges = 15% of Rs. 48,982 = Rs. 7,347
- So, the total value of the gold chain excluding tax = Rs. 48,982 + Rs. 7,347 = Rs. 56,329
- GST @ 3% on the total price = 3% of Rs. 56,329 = Rs. 1,689
- And, finally, the total price with tax becomes = Rs. 56,329 + Rs. 1,689 = Rs. 58,018.
So, the final bill amount of your gold chain is Rs. 58,018.
Things You Must Keep In Mind
When calculating the price of gold jewellery, there are several things you must keep in mind. For example, the price of gold varies according to the purity level. And the price of gemstones and diamonds must be separately calculated.
Here are some things to be aware of when buying gold jewellery to avoid being tricked;
The price of gold depends on its quality and location
Gold is most commonly used in jewellery because of its durability and beauty. However, not all jewellery made out of gold is equal. Some pieces are made out of 24 karats of pure gold while others are made out of 14 karat gold.
If you buy a gold jewellery item made out of 24 karat gold it will have a much higher price than if you were to buy the same item made out of 14 karats gold. This is because the price of gold increases as the purity level goes up. 24K gold is the purest form of gold, but it is too soft to be used for jewellery. The most common and purest form of gold that can use for jewellery is 22k. It is 91.6% pure gold, which means that only 8.4% of the gold is left behind, it is also called 916 gold.
Pricing of studded stone jewellery slightly differs
Studs are usually added to jewellery items to make them more valuable. But the price of these studs varies depending upon their size, shape, material, and other factors. So, before purchasing any jewellery item, check whether the weight of the stone has been minus from the weight of the gold jewellery. As mentioned above the price of gemstones and diamonds must be separately calculated from the price of gold weight.
Buy only standardized jewellery
The Bureau of Indian Standards (BIS) performs hallmarking, which is a certification of the purity of gold used. For hallmarking, the BIS emblem is embossed along with the fineness number (equivalent to the carat), the hallmarking centre mark, and the jeweller’s identity mark.
The table below can help you figure out what fineness number corresponds to which purity level.
|Gold purity in jewellery
Invest in pure gold instead of a studded one
Pure gold jewellery is always worth way more than its studded counterpart. A simple reason why this happens is that the price of pure gold is always higher than that of the studded version. Also, the cost of manufacturing a studded piece is quite high.
This is because the process requires many steps like cutting, polishing, and setting the stones. All of these processes require lots of time and money. Therefore, if you are looking to save money, then investing in pure gold jewellery would be a better option.
Making charges constitute a substantial portion of your total bill
Jewellery stores often charge extra fees for different services they provide. These include cleaning, repairing, and polishing. Before making any purchase, find out exactly what the store charges for each service.
Also, try to get an estimate of the total amount you’ll pay for the entire service.
Can you trust the price of gold jewellery?
You should not take the jeweller’s price quote at face value because there are several elements that influence the ultimate amount you will spend, such as gold price, making costs, gem value, and so on.