Explained: How Is Gold Jewellery Price Calculated In India? Here's The Detailed Breakdown

From childhood to adulthood, and even through generations, buying gold jewelery remains a cherished tradition in our country. It holds significant cultural importance for many individuals across India, particularly for special occasions like weddings.

However, regardless of when or why you buy gold, it's always a substantial investment, isn't it? That's why it's essential for buyers to understand how jewellers determine the price of the jewellery they sell.

Here's a guide to help you grasp how jewellers calculate the price of gold jewelery and the various factors that influence this calculation.



Every morning, gold traders and retailers adhere to the daily gold price set by the local gold jeweler association in each city, as reported by Forbes. This results in varying gold rates across different cities for the same weight of gold items. However, the price differences are generally minor because other significant factors influence the final price of jewelry, such as making charges, taxes, and gold purity. Therefore, understanding the formula used by jewelers to calculate the final price of jewelry is important.

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While going jewellery shopping, you will find that every shop has different pricing attached to the gold jewellery. Even when the rate of gold is same as per its purity (in carat) and weight (in grams), there is still no standard pricing for every gold item in the market. That is where its important to remember and understand the above mentioned factors that impact your gold price and calculation.

As we mentioned, gold traders and retailers work as per the daily price set up by the gold jeweller association every morning. Every city has their local gold association that declares gold rates every day. That is why every city has price differences even for the same weight of the gold item.


Gold jewelry prices vary in India due to several factors:

• Gold Purity: The purity of gold is measured in carats. Higher carat gold (e.g., 24-carat) is more expensive than lower carat gold (e.g., 22-carat).
• Making Charges: Jewelers apply making charges for crafting the jewelry, which can vary based on the intricacy of the design and the labor involved.
• Local Market Conditions: Gold prices can vary slightly between different cities or regions due to local demand, supply, and operating costs.
• Taxes: Goods and Services Tax (GST) is applicable on gold jewelry purchases, which can affect the final price.
• Brand and Reputation: Established brands or reputed jewelers may charge higher prices for their craftsmanship and brand value.
• Design and Workmanship: Unique designs or intricate craftsmanship may command higher prices compared to simpler designs.
• Negotiation: Prices can also vary based on negotiation skills, discounts, promotions, and other factors specific to individual transactions.

Final price of the jewelry = Price of gold per gram (22 carat or 18 carat) x Weight in grams + Making charges per gram + Goods and Services Tax (GST) on (Price of jewelry + Making charges).

To illustrate this calculation, consider the following example:

Suppose the gold rate quoted by the jeweler is:

Price for 10 grams of 22 carat gold = Rs 30,000

Price for 1 gram of 22 carat gold = Rs 3,000

Weight of the gold item: 20 grams

Making charge = Rs 300 per gram

GST = 3% (flat rate)

Therefore, the total price of the jewelry would be: Rs 3,000 x 20 grams + (20 grams x Rs 300) = Rs 66,000

When GST @ 3% is applied to this total price, you get:

Rs 66,000 + 3% = Rs 67,980.

Hence, you would need to pay Rs 67,980 for this jewelry purchase.

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