If you have ever wondered why you received a certain amount for your gold — or why two buyers gave you different figures for the same piece — the answer usually comes down to three numbers: purity, weight, and the market rate. Each one affects the final figure significantly. This article explains each one so you know what they mean and how to use them.
1. Purity — What Karat Really Means
Karat is a unit of purity for gold. It tells you how much gold is in your piece relative to 24 parts total. Pure gold is 24 karat (24K) — meaning all 24 parts out of 24 are gold. 22K means 22 out of 24 parts are gold and the remaining 2 parts are other metals (typically copper, silver, or zinc added for durability). 18K means 18 out of 24 are gold — 75% pure.
Fineness is purity expressed as a number per thousand. 24K = 999 fine. 22K = 916 fine. 18K = 750 fine. You may see these numbers stamped on hallmarked jewellery.
Most Indian jewellery sold in Hyderabad is 22K (BIS hallmark code: 916). Investment-grade coins and bars from MMTC-PAMP are 999.9 fine — the highest available purity.
How Purity Is Measured
There are several ways gold purity is tested. The most common in professional gold buying centres today is XRF (X-Ray Fluorescence) — a non-destructive test that reads the exact metal composition. The machine directs X-rays at your gold, and the returning energy pattern tells the machine precisely how much gold, silver, copper, and other elements are present.
Older methods include the acid test (touching gold to a test stone and applying acid to the mark) and fire assay (melting a sample for a homogeneous reading). XRF has largely replaced acid testing for modern jewellery because it is faster, more precise, and non-destructive.
A hallmark stamp on jewellery claims the purity at the time of manufacture. XRF gives you the actual purity at the time of testing — these can occasionally differ for older pieces, repaired ornaments, or items with surface coatings.
2. Weight — Gross vs. Net
When you place your gold on a scale, the number displayed is the gross weight — the total weight of the item including everything: the gold, any stones (diamonds, rubies, sapphires), the clasp, enamel, and any non-gold components.
For gold valuation, the gold buyer deducts the estimated weight of non-gold materials to arrive at the net gold weight. This is the number used in the final calculation. The deduction is typically measured by removing visible components where possible, or estimated by the buyer based on construction type.
Example
A gold necklace weighs 15g gross. It has a gold clasp (gold) and two small rubies. The rubies together weigh an estimated 0.3g. Net gold weight = 15g − 0.3g = 14.7g. Only 14.7g is used in the valuation formula.
For plain gold items with no stones, the gross and net weights are very close or equal. For heavily set jewellery or kundan work, the difference can be significant. Always ask for both numbers before agreeing to the valuation.
3. Market Rate — The Number That Changes Every Day
Gold is a globally traded commodity. Its price changes continuously during market hours based on international spot prices, currency exchange rates (USD/INR), domestic demand, and futures trading on the MCX (Multi Commodity Exchange of India).
The gold rate published for Hyderabad each morning reflects the MCX rate converted to Indian rupees per gram for 24K (999.9 fine) gold. Buyers apply this base rate and then multiply by your gold's purity fraction to get the effective rate for your karat.
Because the rate changes daily, your gold's valuation on a Monday may be different from Tuesday's — even if everything else stays the same. If you are watching for a high price to sell, tracking the MCX gold rate over a few weeks can help you time your sale.
Putting It Together: How the Three Numbers Combine
Formula
Gold Value = Net Weight (g) × (Karat ÷ 24) × 24K Market Rate (₹/g)
Illustrative Example (rates change daily):
Net weight: 10g · Karat: 22K · Assumed 24K rate: ₹7,000/g
= 10 × (22/24) × ₹7,000 = 10 × 0.9167 × 7,000 = ₹64,167
What Varies Between Buyers
The market rate is publicly available and broadly consistent across buyers. Where buyers differ is in how they measure purity (equipment quality and honesty), how they handle stone deductions (accuracy and transparency), and whether they apply additional deductions like wastage or service margins.
A professional gold buying centre using XRF testing and transparent step-by-step calculation gives you confidence that the three inputs — purity, weight, rate — are correctly measured and honestly applied.