Its quite possible that you have old gold Jewellery that you would either like to sell back to the Jeweller or have it exchanged for newer Jewellery. Below are the norms used in valuation of any old gold Jewellery by the jewellers.
BIS Hallmark’ed OLD Gold Jewellery:
In case of the BIS Hallmark gold Jewellery, you’ll get the full value of your gold at the prevailing market prices on that day. There will be no depreciation of the gold purity in case of BIS Hallmark. Also, as you pay VA (wastage charges) during the initial purchase of your Jewellery there will not be any other wastage charges again during either exchange or sell back.
NON BIS Hallmark’ed OLD Gold Jewellery:
In case of non Hallmark Jewellery, the Jeweller will perform a Purity check to determine the purity of gold and its proportion/ratio in the ornament. To get the estimated value, they do a Computer based X-Ray test which gives the gold purity in percentages. To attain final value, they will melt the ornament and then again runs the Computer based X-Ray test. There will be up to +/- 5% change from first test (only computer test) and the latest test (melts gold and runs computer test).
How to calculate price value of OLD Gold Jewellery:
Once you have your old gold melted and computer tested to find the purity of the gold, then you can calculate the value of your gold by market price as shown by example below.
Say your old gold chain weighs 18.743 grams. Its purity check is found to be 79%. Then your gold quality Karat will be 24*79% = 18.96 Karats.
Based on Weight: As the Purity check indicates that your old gold has only 79% of gold and 21% of impurities in it. Thus Jeweller will deduce the 21% of weight from your old gold jewellery as wastage, that is 18.743*21% = 3.936 grams. Thus your effective gold weight becomes, 18.743 – 3.936 = 14.807 grams. Some Jewellers, will deduct a minor percentage towards dust, say 0.30%. Then your gold effective weight becomes 14.807 – 0.30 = 14.507 grams.
Assume that 24 K market gold price on that day is 2498, then the final value of your gold will be 14.507 * 2498 = Rs. 36,238.
Based on Purity: As the Purity check indicates that your old gold has only 79% of gold and 21% of impurities in it. Thus Jeweller will deduce the 21% of price or gives you only the 79% of price that of market gold price. Assume that 24 K market gold price on that day is 2498, then your gold price will be 2498*79% = Rs. 1,973 per gram. Thus your effective gold price becomes, 18.743 * 1973 = Rs. 36,979. Some Jewellers, will deduct a minor percentage towards dust, say 0.30%. Then your gold effective weight becomes 18.807 – 0.30 = 18.507 grams.
Then the final value of your gold will be 18.507 * 1973 = Rs. 36,514.
Furthermore, did you know that, as an element, gold holds the title as being one of the elements that is the least reactive? In its purest form, gold does not rust or tarnish as it does not combine with oxygen very easily. This is why pure gold stays shiny for long periods of time. Unfortunately, when it comes to gold jewellery, it is very rare to find pure gold jewellery pieces.
See below for a quick table detailing the formulae used to valuate your old gold jewellery either by weight or Purity.
Purity Percentage | Karats | Formula | Gold price Per gram | Formula | |
100% | 24 | 24/24*100 | 2723 | Market Price | |
91.67% | 22 | 22/24*100 | 2496 | 2723*91.67% | 2723*22/24 |
79% | 18.96 | 24*79% | 1972 | 2723*79% | 2723*18.96/24 |