Quick answer
Gold jewellery's retail price is built from its melt value (purity percentage × weight × current spot price), plus making charges (the jeweller's labor and design markup) and applicable local taxes — meaning two pieces with identical gold weight can have very different prices depending on design complexity and where they're bought. 24K gold is close to pure (about 99.9%) and softest, 22K is about 91.6% pure and more durable for daily-wear jewellery, and 18K is about 75% pure, harder still and common in Western-style fine jewellery — with purer karats generally better suited to investment and lower karats better suited to everyday-wear design durability.
Two gold rings can weigh the same and still cost very different amounts. The gap almost never comes from the gold itself — it comes from purity, design complexity, and the making charges layered on top of the metal's actual melt value.
The jewellery pricing formula
Formula used:
Jewellery Price = (Purity % × Weight × Spot Price per Gram) + Making Charges + Applicable Taxes
The first term — purity × weight × spot price — is the melt value: what the gold itself is actually worth if you stripped away the design and sold it as raw metal. Everything added on top of that is the cost of craftsmanship and local taxation, not gold.
Karat purity, side by side
Common gold karat purities and their typical use case
| Karat | Approx. purity | Typical use case |
|---|---|---|
| 24K | ~99.9% | Investment bullion, bars, and coins — too soft for durable everyday jewellery design on its own |
| 22K | ~91.6% | Traditional ornamental jewellery across South Asia and the Gulf — a common balance of purity and wearable durability |
| 18K | ~75% | Western-style fine jewellery and gem-set pieces — harder and more scratch-resistant, with more non-gold alloy content |
| 14K | ~58.5% | Everyday Western jewellery prioritizing durability and lower cost over gold content |
Lower-karat gold is mixed with other metals (commonly copper, silver, zinc, or nickel), which is what increases hardness and scratch-resistance at the cost of gold content. There's no universally "better" karat — it's a trade-off between purity (and therefore melt/investment value) and physical durability for daily wear.
What "making charges" actually cover
- Labor and craftsmanship — the time and skill needed to shape, polish, and finish the design, which scales with design complexity far more than with weight
- Wastage allowance — some jewellers build in a small percentage for metal lost during the crafting process
- Retailer margin — part of what's labelled as a making charge is simply the seller's profit margin on top of actual production cost
- Design premium — intricate, handcrafted, or branded designs typically carry meaningfully higher making charges than simple, machine-made pieces of the same weight and purity
Because making charges are layered on top of melt value rather than baked into the gold price itself, they're almost never recovered in full if you resell the piece — a buyer or refiner typically pays close to melt value, not the original retail price including making charges and taxes.
Jewellery vs. investment bullion
If the goal is simply to hold gold as a store of value, bullion (bars or coins, typically high-purity 24K or close to it) carries far lower making charges relative to its weight than ornamental jewellery, and its resale value tracks the spot price much more closely. Jewellery makes sense when you want to wear it; as a pure investment vehicle, the making charges and lower typical purity of ornamental pieces generally make it a less efficient way to hold gold value than bullion.
Calculate the melt value, making charges, and total price of a specific piece — in 24K, 22K, 18K, or 14K — with the Gold & Jewellery Calculator, and track live spot gold prices on Live Market Analysis before buying or selling.
For educational and informational purposes only — not financial, investment, trading, legal or tax advice. See our full Financial Disclaimer.
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