Why the gold rate in the news is not what you get paid

You look up the gold rate before going to sell. The number is there in the first search result, big and confident: so many rupees per 10 grams. Then you reach the counter and the figure you are offered is noticeably lower, and it feels like something has been done to you.

Usually nothing has. The published rate and a buyer's payout are two different numbers that were never the same thing. Here is every step between them, in order, including the steps that are in our favour rather than yours.

The published rate is for pure gold

The rate quoted in the news is for 24 karat gold — 99.9% pure — traded in quantity between people in the trade. It is a commodity reference price.

Your jewellery is almost certainly not 24k. Pure gold is soft enough to bend with your hands, so nobody makes a wearable chain out of it. Indian jewellery is usually 22k, which is 91.6% gold. Lighter and stone-set pieces are often 18k, which is 75%.

So the first adjustment is not a deduction at all. It is arithmetic:

• 10 g of 22k jewellery contains 9.16 g of gold
• 10 g of 18k jewellery contains 7.5 g of gold

The rest is copper, silver and zinc. Those metals are real, they hold the piece together, and they are worth close to nothing at resale.

This single step accounts for most of the gap that surprises people. A rate quoted for 24k, applied to a 22k chain, is already about 8% away from anything you could receive.

Making charges do not come back

When you bought the piece, the bill had at least three parts: the gold, the making charges, and GST. Making charges pay for the design, the labour and the jeweller's margin. Depending on the piece they can be a small percentage or a very large one — intricate work costs more to make than a plain chain.

That money bought you a made object. When the object is sold for its metal, the making charge is gone. It is not being withheld by the buyer; there is nobody to pay it to you.

The same is true of the GST you paid at purchase. It went to the government, not into the gold.

This is the part people find hardest, and it is worth saying plainly: if you bought heavily-worked jewellery and are selling it as metal, the difference between what you paid and what you receive can be large, and no buyer can close that gap.

Stones and fittings are not gold

Kundan settings, meena work, lac filling inside a bangle, the thread in a necklace, stones of any kind. None of it is gold and none of it is paid for at the gold rate.

A heavy-looking bangle can contain a surprisingly small amount of gold once the lac inside it is accounted for. This is not a trick; it is how the piece was made. But it does mean the weight on your kitchen scale at home is not the weight the payout is based on.

At our counter these parts are separated or accounted for in front of you before anything is weighed, so you can see what is being taken off.

The buying rate is below the market rate

Every buyer, everywhere, buys below the reference price. There is a real reason for it: scrap jewellery has to be refined back into usable gold, and refining costs money, takes time, and carries the risk that a batch assays lower than expected.

That gap between the buying rate and the reference rate is the spread, and it is where a gold buyer's income comes from. It differs from shop to shop, which is exactly why comparing offers is worth your time.

What you are entitled to know is what rate is being used. Ask. A buyer who will tell you the per-gram figure they are working from is one you can check against another shop. A buyer who only gives you a final total has not told you anything you can compare.

Putting it together

Three things decide the figure, and only three: how much pure gold is in the piece, which the karatmeter and the scale establish in front of you; the buying rate per gram on the day, which you are told before anything starts; and nothing else.

Notice what is not in the list. Not the making charges. Not the GST you paid years ago. Not the sentimental value, which is real but which no scale can read.

We do not print a payout figure or a worked example here, because any number on a page is a guess about a piece nobody has tested yet. The working is written down for you at the counter, on your piece, at that day's rate.

What a fair transaction looks like

You do not need to trust anyone's word about any of this. You need to see three things:

• The purity, read off a karatmeter with the display facing you
• The weight, taken on a scale you can watch being zeroed
• The rate, said out loud before the calculation starts

If you have those three numbers, you can redo the arithmetic yourself, and you can take the same three numbers to another shop and compare. That is the whole protection, and it costs the buyer nothing to give you.

If a shop will not show you the display, will not tell you the rate, or hands you a total with no working, you are not being asked to trust them. You are being asked to guess.

Before you sell anything

Read how we value your gold if you want the step by step version of what happens at our counter, or today's gold rate explained if you are still working out what the number you looked up actually means.

And if you would rather just ask someone, call us. We will tell you the day's buying rate whether or not you sell to us.

Questions people ask

Why is the gold rate I get paid lower than the rate in the news? The published rate is for 24 karat gold traded in bulk. Jewellery is 22 karat or less, so its gold content is lower, and a buyer's margin comes off that. The right question is not whether there is a gap but whether the buyer shows you every step of it.

What rate should I expect for 22 karat jewellery? Roughly the day's 22 karat buying rate multiplied by the measured purity and weight, minus the shop's margin. At our counter in Noida Extension the three numbers are written down in front of you before any total is discussed.

How do I check I am being paid the right rate? Ask for the purity reading from the machine, the weight after stones are removed, and the buying rate for the day. If any of the three is missing, the total cannot be checked. Call or WhatsApp 9217742656 for today's number before you set out.