How is the Price of Gold Jewellery Calculated

How Is the Price of Gold Jewellery Calculated

The Math Final price of the jewellery = Price of (22 KT or 18 KT) gold X (Weight in grams) + Making charges + GST at 3% on (Price of jewellery + making charges). (Text by Preeti Motiani/ET Online)

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Example to Help You Understand Suppose the price of gold listed by the jeweller is Rs. 27,350 for 10 grams of 22KT gold. Now, if you wish to purchase a gold chain of 9.6 grams, then price will be calculated as.

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Final Bill Amount Price of 1 gram of gold = Rs 27,350 divided by 10 = Rs. 2,735; Price of 9.60 grams' gold chain = Rs 2,735 times 9.60 grams = Rs 26,256; Add making charges, suppose 10 per cent, which comes to Rs 2,625.60 (10% of Rs 26,256); Total price of gold jewellery = Rs 28,881.60 (price of 9.60 grams gold chain plus making charges); Add GST at 3%: Rs 866.44 (3% of Rs 28,881.60) and hallmarking charge at Rs 35; The final billing amount will be Rs 29,783.04 (Rs 26,256 + Rs 2,625.60 + Rs 866.44 + Rs 35)

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Points to Note While Buying Gold Jewellery Here are a few things you should be aware of while buying gold to avoid being tricked.

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Studded Jewellery While buying one should know that the value of gold in the piece has to be calculated based on the entire weight of the jewellery minus weight of diamonds and gemstones. The cost of diamonds and gemstones should be added separately.

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Purity Gold jewellery is available in different Karats (KT). Karat is the measure of purity of gold. 24KT gold is the purest form of gold but it is too soft to be used for making jewellery. The most popular form of gold available in jewellery is of 22KT which contains 91.6% gold. Alloys such as zinc, copper, cadmium or silver are added to the gold to make it stronger and more durable. If you are buying diamond jewellery, then 18KT gold is used. It contains 75% gold.

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Pricing Price of gold jewellery depends on two things - a) parts of gold in the jewellery, that is, 22KT or 18KT, and b) type of metal used to mix with the gold.

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Making Charges Making charges vary depending on the type of gold jewellery you are buying. This is because every ornament requires different style of cutting and finishing. It also depends on how much fine detailing is required in the design, i.e., if it is a man-made or machine-made. Machine-made jewellery usually costs less than man-made ones.

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Hallmark Hallmarking is done to certify the purity of gold jewellery. Hallmarking is done by the Bureau of Indian Standards (BIS) and is a certification of the purity of gold used.

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