How is Gold Ornament Price Calculated in Hyderabad
Indians are known to be very fond of Gold, which has been widely used as an investment option and a status symbol for ages. While gold ornaments are sold at varying prices, there is a set mechanism that goes into the pricing of these ornaments. Amongst the widespread demand for Gold in India, there is a spike in the number of gold buyers in Hyderabad. As a result, there has been a surge in the jewellers providing gold ornaments in the area, particularly in the old city. But as one wanders in these stores, ornaments are seen being sold at varying prices. There may be a drastic price fluctuation across the sellers. What goes on with such prices? How are the prices determined? Let us look into a study of how gold ornament prices are calculated in Hyderabad.
Calculating the Price of Gold In Hyderabad
The basic formula used in calculating the price of Gold ornaments is shown below.
Price of a gold ornament = Price of 22 Karat Gold (weight + Wastage) + Making + GST
Buyers seeking to calculate gold prices today can evaluate prices using the above formula before they step out searching for their most desirable products. To fully understand how the pricing works, let us look at the various components of the formula to understand how the price of Gold is calculated.
Karat The most crucial component in Gold jewellery is Karat, which represents how much Gold is present in the jewellery. Gold is typically mixed with elements to make it appropriate for jewellery use. Such elements may comprise silver, copper, nickel, etc. The purest form available for Gold ornaments consists of 24 Karat Gold. However, it is too soft to be crafted into jewellery. The most popularly used is 22 Karat Gold. A 22 Karat Gold would consist of 91.6% Gold. In other words, it implies that the ornaments comprise 22 parts of Gold and the rest are some other metals. Similarly, 18 Karat Gold would comprise 75% Gold. The combination and constituents vary depending on the colour of the ornaments. For instance, in the case of white Gold, a jeweller would use more palladium as an alloy to enrich the ornament. A higher concentration of copper might be considered more beneficial for ornaments depicting rose Gold colour.
Weight Another critical element that ascertains the price of Gold ornaments is the weight of Gold. The heavier the Gold, the more would be the price. The weight is usually measured in grams. There may be stones studded into the ornament. While considering the weight of Gold, it is essential to include only the weight attributed to the Gold component, keeping other elements aside. You may be charged for such stones separately.
Wastage Various stages are involved in crafting fine jewellery out of Gold, such as moulding, melting, shaping, and cutting. However, during the process, some portions of Gold get wasted. The wastage charges include compensation for such remains. The wastage charges may vary depending on numerous factors, such as the intricacy and design, and may differ across ornaments.
Making Making charges comprise a portion of the jewellery cost that goes to the goldsmith. For every ornament that is crafted, a specific portion of the total cost is contributed toward the making. More intricate designs may constitute higher making charges. If the jewellery is machine-made, it may require lesser charges than if it were hand-made. The work, designing, and finishing of the ornament constitute its overall making charges. Making charges can be quoted as a percentage of the value of Gold or a flat rate charged per gram of Gold.
GST GST, or the Goods and Service Tax, is an indirect tax levied by the government. Other than the pricing, consumers must look for hallmarking while planning to buy gold ornaments. The hallmarking is designated by the Bureau of Indian Standards (BIS). From 16 July 2021, the government has made it compulsory to provide hallmarking for gold jewellery. Gold ornaments bear three signs
-Purity or Fitness grade
-6- Digit alphanumeric code.
Source: BIS website
Gold purity in jewellery
Evaluating gold ornaments’ prices carefully before buying the desired jewellery is essential. Understanding the various constituents helps you make more suitable and cost-effective decisions.
Muthoot Gold Point, a unit of Muthoot Exim (P) Ltd. (Precious Metals Division) is a venture of the Muthoot Pappachan Group. It is the first National level organised sector venture to get into recycling of Gold.