Almost everyone who checks a gold rate online and then walks into a shop has the same experience: the number on the counter is higher. Sometimes noticeably higher. It is easy to assume something dishonest is happening, and occasionally it is — but usually it isn't. The two numbers are measuring different things, and once you can separate them you can tell the difference between a fair markup and a bad deal in about thirty seconds.
What the market rate actually measures
The rate you see here, or on any live-price site, is the value of the metal itself. Gold trades continuously in a single global market, quoted in US dollars per troy ounce. That price converts into your currency at the prevailing exchange rate, and scales down to a gram, a tola or a vori by simple arithmetic.
That is all it is. It is the value of the gold if it were a formless lump — no design, no craftsmanship, no shop, no shopkeeper. Nobody sells finished jewellery at that price, and nobody could.
The three things added on top
Making charges
Turning bullion into a bangle takes labour, tools, and skill. Making charges cover that, and they are quoted in one of two ways:
- Per gram — a flat amount for every gram of the finished piece. Common for plain chains and simple bands.
- As a percentage — a proportion of the metal value. Common for detailed work, and the one that deserves more attention, because a percentage charge rises automatically as the gold price rises even though the labour hasn't changed.
Machine-made chains sit at the low end. Hand-set, filigree or antique-finish work sits far higher, and legitimately so — it takes far longer to make.
Wastage
During crafting, some gold is genuinely lost — as dust in filing, as residue in soldering, as offcuts. Wastage is a percentage added to account for it. The honest version reflects real loss, which for most modern work is small. The less honest version is a fixed high percentage applied regardless of the piece, on work where very little is actually lost.
Wastage on a plain machine-made chain should be minimal. If you are quoted a large wastage figure on a simple item, that is a fair thing to question.
The shop's margin
A jeweller has premises, insurance, security, stock sitting idle, and staff. That has to be covered. This is normally folded into the making charge rather than shown separately.
Why the same piece costs different amounts in different shops
The metal value is identical everywhere — gold is gold, and the international price is the international price. Everything above it is set by each shop independently. That is the entire reason prices differ from one street to the next, and it is why knowing the metal value gives you real negotiating power: you are not arguing about the gold, you are discussing the premium.
Working out the metal value yourself
For any piece you need three things — weight, karat and the current rate:
Metal value = weight in grams × (karat ÷ 24) × price per gram of pure gold
So a 10-gram 22K chain contains 10 × (22 ÷ 24) = 9.17 grams of pure gold. Multiply that by the current price per gram and you have the metal value. Anything above it is premium.
Our gold price calculator does exactly this arithmetic for any weight, karat and currency — you can run the numbers on your phone while standing in the shop.
What happens when you sell
Selling reverses everything, and this is where people are most often surprised. A buyer purchasing scrap or old jewellery pays below the metal value, because they have to refine it, and they need a margin. The making charges and wastage you originally paid are gone — they bought labour, not metal, and that labour has no resale value.
This is the single most important thing to understand before buying jewellery as an investment. A piece with a 25% making charge has to appreciate by more than 25% before you break even on resale, on top of whatever the buyer deducts. Coins and bars carry much lower premiums, which is precisely why people buying gold to hold, rather than to wear, buy those instead.
A fair-price checklist
Before you agree to a price, you should know:
- The weight of the piece, weighed in front of you
- Its karat, and ideally its hallmark
- The current metal rate the shop is using, and whether it matches the market
- The making charge, and whether it is per gram or a percentage
- The wastage percentage, if any is applied
- Whether the buy-back terms are stated in writing
None of these are unreasonable to ask. A reputable jeweller answers all six without hesitation — the questions are routine, and being asked them is a sign of an informed customer rather than a difficult one.