The final amount you receive when selling old gold can be affected by several factors beyond the core formula of purity × weight × rate. Some of these deductions are legitimate and clearly disclosed. Others are applied without explanation — and cost you money without you realising it.
This guide walks through the most common deductions applied when selling gold in Hyderabad, what is legitimate, what is questionable, and how to protect yourself.
The Starting Point: Fair Valuation
A fair gold valuation starts with three honestly-measured inputs: the tested purity (from XRF), the accurately weighed net gold content, and the current market rate. If these three inputs are correct and transparent, the calculation that follows gives you a clear baseline.
Any deduction applied below this baseline should be explicitly disclosed and explained. Here are the common ones you may encounter — and how to evaluate them.
Common Deductions — Legitimate and Otherwise
Wastage / Melting Loss
Often questionableA percentage deduction (typically 2–8%) applied to represent the gold 'lost' during melting. For buyers using XRF testing (non-destructive), there is no melting during the valuation process — so a wastage deduction for a non-melting transaction is generally not justified. If a buyer applies wastage, ask specifically why and whether melting is actually part of their process.
Stone and Component Deduction
Legitimate, but scrutinise the amountDeducting the estimated weight of stones, clasps, and non-gold components is correct — only gold content should be paid for. However, the deduction should be based on actual or reasonably estimated weight. An overstated stone deduction (e.g., adding 20% to the gross weight as 'stone weight' on a lightly-set piece) reduces your net gold weight unfairly.
Purity Downgrade
Questionable without justificationSome buyers round down the purity reading. If XRF shows 91.4% gold (22K territory), they might value it at 20K or 21K without explanation. Ask to see the XRF reading on screen and ask what karat they are applying to your calculation.
Buyer's Margin
Legitimate when disclosedGold buyers operate commercially — they buy below the market rate and sell or recycle at or above. A disclosed margin of, say, 1–3% below the market rate is a legitimate buying cost. The issue is when this margin is applied on top of other deductions that have already reduced your payment.
Making Charges Recovery
Not applicable to gold sellingMaking charges are a premium paid when buying jewellery from a retailer. When selling gold, you are selling the metal content — making charges are not recoverable in any direction. A buyer who claims to deduct 'making charges' is applying an unjustified reduction.
Testing Charges
Should be disclosed upfront if appliedSome buyers charge a fee for testing. This is uncommon at professional centres where testing is part of their valuation process. If testing charges apply, they should be stated before you proceed — not subtracted at the end.
What a Transparent Valuation Should Show You
What to Do If You Are Unsure
The most effective thing you can do is ask questions — clearly and specifically — before accepting any offer. A professional gold buyer should be able to answer each of these without hesitation:
If a buyer cannot clearly answer these questions or becomes evasive when asked, that is a signal to be cautious. You are entitled to understand exactly how your gold's value was calculated before you accept or decline.