Steps to Calculate the Gold Price for Jewellery

Gold prices refer to the amount of money that must be paid for one ounce of gold. Gold prices are affected by various factors, including supply and demand, the global economy, inflation, geopolitical events, and central bank policies. In addition, gold prices are affected by speculation and investor sentiment, the strength of the U.S. dollar, and the availability of other investment options. For example, if the U.S. dollar is weak, gold prices tend to rise as it becomes cheaper for foreign investors to purchase. Conversely, if the U.S. dollar is strong, gold prices tend to fall as investors can invest in other assets such as stocks or bonds. Geopolitical events can also affect gold prices, as investors often look at gold as a safe haven during political or economic instability. Finally, central bank policies affect gold prices as central banks can buy or sell gold to increase or decrease supply.

The additional costs in calculating the gold price include the cost of production, transportation, storage, taxes, fees, and commissions. Additionally, the cost of labour, the cost of refining, and the cost of marketing are typically factored into the calculation of the gold price. Finally, the cost of insurance, hedging, and risk management should also be considered as part of the total cost of calculating the gold price.

This blog aims to bring those critical steps to calculating the gold price for jewellery so you can make informed choices when it is time to shop for your collection. 

Step 1: Research the current spot price of gold 

What is the spot price of gold? 

The spot price of gold is the current rate at which gold is bought or sold in the market. It is a universal benchmark used to represent the current market value of gold and is used as a reference point when buying and selling gold. This spot price is determined by the global spot market, a 24-hour market where buyers and sellers come together to determine the price of gold. This price fluctuates daily, depending on supply and demand and other factors such as economic and political news. Your best source to learn about gold prices across different parts of the country is

Step 2: Research gold karats 

What is gold karat? 

A gold karat is a unit used to measure the purity of gold. Pure gold is 24 karats, and any gold less than 24 karats is considered an alloy, meaning it is a mixture of other metals. As the karat number decreases, the percentage of gold present in the metal also decreases.

How to determine the gold karat? 

Karat (k) is a measurement unit used to indicate gold’s purity – the higher the karat number, the purer the gold. The most common karats of gold are 10K, 14K, 18K, and 24K. 

  • 10K gold is the lowest karat gold, containing ten parts gold and 14 other metals, making it 41.7% gold. It is the least expensive. 
  • 14K gold contains 14 parts gold and ten other metals, making it 58.3% gold. It is more expensive than 10K and is common in making jewellery. 
  • 18K gold contains 18 parts gold and six other metals, making it 75% gold, and 22K gold has 22 parts gold. These are considerably more expensive than 10K and 14K but lend themselves to different types of jewellery. 
  • 24K gold contains no other metals, making it the purest form. It is the most expensive. It is also the softest form and not conducive to jewellery. We want our gold jewellery to be sturdy enough to retain the design and for diamonds or gemstones to stay firm.

Step 3: Calculate the gold price 

What is the formula for calculating the gold price?

Gold jewellery could be in yellow, rose, or white gold and made into bangles, bracelets, necklaces, earrings, or rings. Then, some beautiful pieces have diamonds or gemstones embedded in them. While jewellery retailers may include the stones when calculating the price of jewellery, it is always better to have the jeweller calculate the cost of the gold and the stones separately. For example, if you are looking to sell or exchange your jewellery, the jeweller will assess the item by taking the weight of the stones and deducting their price from the item’s total price. Moreover, the purity of the gold will also be evaluated before giving you the final cost of the jewellery.

Twin Leaves Open Diamond Ring

Twin Leaves Open Diamond Ring

Alisha Ornate Diamond Ring

Alisha Ornate Diamond Ring

Cori Intricate Diamond Ring

Cori Intricate Diamond Ring

Dome Triad Diamond Bracelet

Dome Triad Diamond Bracelet

Formula for calculating gold price

If you are looking to buy gold jewellery, the sellers always use a particular formula:

Price of the gold jewellery = Gold rate x weight of gold (gms) + Making charges + GST

  • Assume that the current rate of 10 grams of 22K gold is ₹50,950.
  • One gram of gold will be ₹5,095.
  • If you want to make a gold bangle weighing 5 grams, you will calculate it thus: ₹5095*5 = ₹25475. 
  • Making charges maybe 10% of the gold price, i.e., ₹2,547.5, bringing the total price to ₹25475 + 2547.5 = ₹28022.5
  • Adding 3% of GST on gold (3% of ₹28022.5) = 840.70 (rounded off)
  • ₹840.7 + ₹28022.5 = ₹28863 (rounded off)

It is not common to have the weight of gold in mind when looking at a beautiful bangle. However, this formula will apply whether you 

Now that you know the formula jewellers use to calculate the price of gold, we will give you a few tips on making your jewellery shopping easy. 

Additional tips for buying gold jewellery

Knowledge of gold spot price and a comparison between various retailers across the country is the starting point. Here are a few tips that should help you make your spending worthwhile.

  • Choose a reputable jeweller: Choose a reputable jeweller who will provide you with a certificate of authenticity and a guarantee for their gold jewellery. 
  • Check the gold’s purity: Check the gold’s purity before buying it. The higher the purity, the more valuable the gold. 
  • Know the karat: Know the karat of the gold jewellery you buy. The karat is used to measure the purity of gold. 
  • Look for hallmarks: Look for hallmarks that indicate the purity of the gold jewellery. You will have this at CaratLane, whatever type of jewellery you choose.
  • Get an appraisal: Get an appraisal of the gold jewellery to ensure it is genuine and worth the price you are paying. 
  • Shop for discounts: Look for discounts and special offers on gold jewellery. Many jewellers offer discounts during festivals and special occasions. 
  • Budget wisely: Set a budget before buying gold jewellery. It is vital to buy something that is within your budget. Make your heart and wallet happy!
  • Know the current price of gold: Check the current price of gold before making a purchase. It will help you determine the fair price for the jewellery, regardless of your location.


The gold price for jewellery is an essential factor when it comes to making a purchase. While the market determines the price, there are ways to accurately calculate the gold price for jewellery. By understanding the different factors that affect gold prices, such as the cost of processing, purity, and the current spot price of gold, you can make an informed decision when you enter CaratLane to buy jewellery. Although buying gold jewellery is always a pleasure, it is also a source of investment and, therefore, not to be taken lightly. 

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