How gold pricing actually works
Gold trades globally in one unit and one currency: US dollars per troy ounce. Every local price you see — rupees per tola in Karachi, dirhams per gram in Deira, baht in Bangkok — is that single number run through two conversions.
The formula
To get from the spot price to the price of a specific item:
price = (spot ÷ 31.1034768) × FX rate × purity × weight in grams- Divide by 31.1034768 to turn dollars per troy ounce into dollars per gram.
- Multiply by the exchange rate for your currency.
- Multiply by purity — 22K gold is only 91.67% gold.
- Multiply by the weight in grams.
What karat means
Karat is a fraction with 24 on the bottom. 24K is pure, 18K is 18 parts gold to 6 parts other metals, or 75%. The hallmark stamped on jewellery is the same number expressed in parts per thousand — 750 for 18K, 916 for 22K.
| Karat | Purity | Hallmark | Where it's common |
|---|---|---|---|
| 24K | 99.9% | 999 | Bars, coins, investment gold |
| 22K | 91.7% | 916 | India, Pakistan, Bangladesh |
| 21K | 87.5% | 875 | Gulf states, Egypt, Levant |
| 18K | 75.0% | 750 | Europe, designer jewellery |
| 14K | 58.3% | 585 | United States |
| 9K | 37.5% | 375 | United Kingdom |
Weight units around the world
The troy ounce (31.1035 g) is the trading standard and is heavier than the ordinary kitchen ounce (28.3495 g) — a distinction worth remembering. The tola (11.6638 g) is standard across India, Pakistan and much of the Gulf. Thailand prices in baht (15.244 g). The US jewellery trade uses pennyweight (1.5552 g).
Why the shop price is higher
Metal value is the floor, not the price. On top of it a jeweller adds making charges (often 5–25% depending on how intricate the piece is), local sales tax or VAT, and a retail margin. When selling back, expect to receive the metal value minus a spread — which is why jewellery is a poor investment compared with bars or coins.
Data sources
- Spot prices: gold-api.com
- Exchange rates: exchangerate-api.com , updated daily
Built and maintained by Mohammed Jamil. Spotted a wrong conversion factor? Email [email protected].