How gold prices are worked out
Gold is priced by weight and purity. The rate for 24 karat gold, which is 99.9% pure, is the base. Lower karats contain less gold, so their price per gram is the 24K price times the karat divided by 24. If 24K is 480 a gram, 22K is 440, 21K is 420 and 18K is 360. The weight times the rate for the karat gives the value of the gold itself. A jewellery bill then adds the making charge and, where it applies, VAT.
Making charges
The making charge, called المصنعية in Arabic, pays for the work of making the piece. Shops charge it per gram, as a percentage of the gold value or as a fixed amount, and it varies a lot with the design. Plain chains and bangles usually have low charges; detailed or branded pieces cost more. The making charge is often negotiable, so compare it between shops, not just the gold rate.
VAT on gold in the Gulf
VAT is charged on gold jewellery in the UAE at 5% and in Saudi Arabia at 15%, on the whole price including the making charge. Investment gold, such as bars and coins of 99% purity or more, is generally zero-rated in both countries. Bahrain and Oman have their own rates, and Qatar and Kuwait do not have VAT. Choose the rate that applies to you and check the final invoice.
Selling old gold
When you sell gold or trade it in, you are paid for the gold content only. The making charge and the VAT you paid are not refunded. Shops also deduct a small percentage or charge for melting and testing. Enter that deduction to estimate what you will receive. The karat is usually stamped inside the piece, for example 21K or 875.
Grams, tola and ounces
Gulf and South Asian jewellers often quote by the tola, which is 11.6638 grams. International gold prices are quoted per troy ounce, which is 31.1035 grams. The table converts the rate you entered into every unit and karat, so you can compare a price in tola with one in grams.