How Gold Jewellery Price is Calculated by Jewellers in India
Gold is a highly valued precious metal and an integral part of Indian culture. Gold jewellery is a popular form of investment and adornment in India, with a rich history dating back centuries. The price of gold in India is influenced by various factors, including global market trends, domestic demand, and currency fluctuations. In this article, we will discuss how jewellers in India calculate the price of gold jewellery and the formula used for the same.
Factors Affecting Gold Jewellery Prices in India
The price of gold in India is primarily determined by the following factors:
- Purity of Gold: In India, gold jewellery is available in various karatage, ranging from 18k to 24k. The higher the karatage, the purer the gold. The purity of gold is expressed in terms of percentage, where 24k gold is considered 100% pure. The price of gold jewellery is calculated based on the purity of the gold used in the jewellery.
- Weight of Gold: The weight of gold used in jewellery is measured in grams. The heavier the jewellery, the more gold it contains, and the higher the price.
- Labour and Making Charges: Labor and making charges are the costs incurred by the jeweller for making the jewellery. This includes the cost of designing, moulding, casting, polishing, and other processes involved in creating the jewellery.
- Market Trends: The price of gold is affected by market trends, such as global demand and supply, currency fluctuations, inflation rates, and political events.
Formula Used to Calculate Gold Jewelry Price in India
The formula used to calculate the price of gold jewellery in India is as follows:
Price of Gold Jewelry = (Weight of Gold x Purity of Gold x Rate of Gold) + Making Charges
Let us understand each component of the formula in detail.
- Weight of Gold: The weight of gold used in the jewellery is measured in grams. The weight is determined by using a digital weighing scale, which is calibrated to accurately measure the weight of gold. The weight of gold is the primary factor that determines the price of gold jewellery.
- Purity of Gold: The purity of gold is expressed in karats. In India, 24k gold is considered the purest form of gold, while 22k, 18k, and 14k gold are also commonly used in jewellery. The karatage of gold is determined by the percentage of gold in the alloy. For example, 24k gold is 99.9% pure, while 18k gold is 75% pure. The purity of gold is determined by using a karatmeter, which is a specialised instrument that measures the purity of gold accurately.
- Rate of Gold: The rate of gold is the current market price of gold. The rate of gold is determined by the bullion association in India, which monitors the global market trends and determines the daily rate of gold. The rate of gold varies daily based on market trends, currency fluctuations, and other factors.
- Making Charges: Making charges are the costs incurred by the jeweller for making the jewellery. This includes the cost of designing, moulding, casting, polishing, and other processes involved in creating the jewellery. The making charges vary from jeweller to jeweller and depend on the complexity of the design and the level of craftsmanship required.
Gold jewellery is an essential part of Indian culture and tradition. The price of gold jewellery in India is determined by various factors, including the purity and weight of gold, labour and making charges, and market trends. Jewellers in India use a formula to calculate the price of gold jewellery, which takes into account the weight and purity of gold, current market rates, and making charges.
What is karatmeter?
A Karatmeter is a specialised instrument used to measure the purity of gold accurately. It is a non-destructive method of testing the purity of gold and is commonly used in jewellery shops and gold testing laboratories.
The Karatmeter works on the principle of X-ray fluorescence (XRF) technology. The instrument uses a high-frequency generator to excite the gold sample with X-rays. The X-rays cause the gold atoms in the sample to emit fluorescence radiation, which is measured by a detector in the instrument.
The intensity of the fluorescence radiation is directly proportional to the purity of the gold. The Karatmeter compares the intensity of the fluorescence radiation emitted by the gold sample to a known standard of pure gold and calculates the purity of the gold.
The Karatmeter is a highly accurate and reliable method of testing the purity of gold. It is commonly used by jewellers, goldsmiths, and gold testing laboratories to ensure that the gold they are working with is of the desired purity. The Karatmeter is also used by government agencies to monitor and regulate the purity of gold in the market.
How is purity gold calculated?
The purity of gold is typically measured in karats (K) or fineness. In India, the purity of gold is often measured in karats, with 24-karat gold being considered 100% pure.
There are a few methods used to measure the purity of gold, including:
- Acid Test: This is a commonly used method to test the purity of gold. The jeweller will scratch the gold on a black stone and apply a drop of nitric acid to the scratch. The reaction of the acid with the gold will indicate the purity of the gold.
- XRF Spectrometry: This is a non-destructive method of testing the purity of gold that uses X-ray fluorescence (XRF) technology. The jeweller will use a handheld XRF spectrometer to measure the purity of the gold.
- Fire Assay: This is a highly accurate method of testing the purity of gold. The jeweller will melt a small amount of the gold in a crucible and add a special flux to remove any impurities. The resulting material is then weighed, and the purity of the gold is calculated based on the weight.
- Electronic Purity Testing: This method uses an electronic tester that measures the electrical conductivity of the gold. The purity of the gold is determined based on the electrical conductivity.