The Math Behind Selling Old Gold in India
Selling old gold jewellery is a common practice in Indian households, whether for liquidity or to upgrade to new designs. However, the cash you receive is never equivalent to the original purchase price. Here is the mathematical breakdown of why.
1. The Purity Discount (22K vs 24K)
Gold rates listed in newspapers and apps are usually for 24 Karat (99.9% pure) gold. However, almost all Indian jewellery is made in 22 Karat (91.6% pure) or 18 Karat (75% pure). Therefore, the actual value of your jewellery is automatically lower than the headline rate.
2. The Loss of Making Charges
When you buy jewellery, you pay a 'Making Charge' which can range from 8% to 25% of the gold's value. This value is permanently lost when you sell. A jeweller only pays you for the raw commodity value of the melted metal, not for the artistry or labor.
3. Melting / Wastage Deduction
When a jeweller melts your old jewellery to recover the gold, some impurities and alloys are burned away. Standard industry practice allows for a 1% to 3% deduction for this "melting loss." However, unorganized jewellers often arbitrarily deduct 5% to 10%. Using our calculator ensures you know the fair deduction amount.