Buying gold? This simple COMEX calculation can tell if you are being overcharged
Walk into two jewellery stores on the same day, and you may find different prices for the same gold ornament. That often leaves buyers wondering whether they are getting a fair deal or paying more than they should.
In a recent post on X, Sanjay Kathuria shared a clip from the Sanjay Kathuria Podcast, where renowned bullion trader and jewellery expert SS Alam explained a simple way for customers to estimate the fair value of gold before buying jewellery.
Kathuria wrote, “A jeweller charges you three things. The gold rate, wastage, and making charges. Most people only look at the final number.”
However, checking the base gold rate can help buyers determine whether they are paying a fair price.
How to calculate the gold price in India using the COMEX rate?
International gold prices are generally quoted in US dollars per troy ounce on exchanges such as COMEX. To estimate the Indian gold price, buyers need to convert the international price into rupees per gram and add applicable duties and taxes.
He wrote, “Check COMEX for the international per-ounce price. Multiply it by today’s dollar-rupee rate. Convert that ounce rate into grams. Then add 6% excise duty, and on top of that, 3% GST.”
Let’s take an example. Assume the COMEX gold price is $4,030 per ounce and the exchange rate is ₹96 per dollar.
First, convert the international gold price into rupees:
- $4,030 × ₹96 = ₹3,86,880 per ounce
Using 1 ounce = 28.35 grams, the price per gram comes to:
- ₹3,86,880 ÷ 28.35 = ₹13,650 per gram. This is the approximate international gold price converted into Indian currency.
Next, add around 6% excise duty:
- 6% of ₹13,650 = ₹819. This brings the gold price to ₹14,469 per gram
Finally, add 3% GST:
Therefore, the estimated price of 24-karat gold is around ₹14,903 per gram.
How to calculate the price of 22-karat gold?
Jewellery is made from 22-karat gold, as it offers greater durability than pure 24-karat gold.
Kathuria explained that, “For 22 karat, you multiply by 91.6%, because 1 karat equals 4.16% purity, not the 4.16% purity per karat everyone assumes.”
Since 22-karat gold is approximately 91.6% pure, the estimated price would be:
- ₹14,903 × 91.6% = ₹13,651 per gram
So, the value of 22-karat gold in India comes to around ₹13,651 per gram before adding wastage, making charges, and other costs.
While making charges and wastage can differ across jewellers, understanding the base gold price can help buyers compare quotes and make a more informed purchase decision.
Disclaimer: This is for informational and educational purposes only. Please consult a qualified expert before making any decisions.
