How gold is priced, from spot to your item
Every gold price in the world starts from one number: the international spot price of pure gold, quoted in US dollars per troy ounce. Everything else is arithmetic on top of it.
Three steps get you from that figure to what your item is worth:
- Convert to a per-gram price. Divide the spot price by 31.1035, the number of grams in a troy ounce.
- Adjust for purity. Multiply by the karat fraction — 22K is 22/24, or 91.67%.
- Multiply by weight in grams.
With gold at $2,400 an ounce, a 10 gram 21K piece contains 8.75 grams of pure gold and carries a melt value of about $675. That number is the floor of any conversation about the item — what the metal alone is worth. What you pay in a shop, or receive from a buyer, moves away from it in opposite directions.
Because the Gulf currencies are pegged to the dollar, this arithmetic is unusually stable there. The dirham has been fixed at 3.6725 to the dollar since 1997 and the Saudi riyal at 3.75 since 1986, so a dollar move in spot translates almost exactly into a dirham move at the counter. The Kuwaiti dinar tracks a currency basket rather than the dollar alone, and the Egyptian pound has floated since 2024, so both of those move on their own.
Karats, hallmarks and what each market actually buys
Karat is a fraction out of 24. The same purities carry different names depending on where you are standing, which is why a hallmark and a karat are two ways of saying one thing.
| Karat | Purity | Hallmark | Where it dominates |
|---|---|---|---|
| 24K | 99.9% | 999 | Bars and coins everywhere; investment gold |
| 22K | 91.67% | 916 | South Asia, and South Asian communities across the Gulf |
| 21K | 87.5% | 875 | Saudi Arabia, UAE and the wider Gulf — the everyday standard |
| 18K | 75% | 750 | Europe, and stone-set pieces everywhere |
| 14K | 58.3% | 585 | The United States — the most common jewellery purity |
| 10K | 41.7% | 417 | US budget jewellery; the legal minimum to be called gold there |
The practical consequence is that the same necklace is described differently in Dubai and Dallas. A Gulf buyer choosing between 21K and 22K is weighing durability against gold content; a US buyer is usually choosing between 14K and 10K, which are half gold or less. Neither is better — they reflect whether the piece is bought primarily as jewellery or primarily as stored value.
One warning worth carrying: a karat stamp is a claim, not proof. Reputable markets regulate it — the UAE requires hallmarking and the Dubai Gold & Jewellery Group publishes the reference rate every shop displays — but an unmarked or informally marked item should be tested before you price it on the stamp alone.
Grams, troy ounces, tola and pennyweight
Four units are in common use and mixing them up is the most expensive mistake on this page.
- Troy ounce (31.1035 g) — how spot is quoted internationally. Note it is heavier than the ordinary ounce of 28.35 g, so using kitchen scales set to ounces will undervalue your gold by about 10%.
- Gram — how gold is actually bought and sold across the Gulf, South Asia and Europe. Shop displays in the Dubai souk are per gram, by karat.
- Tola (11.6638 g) — the traditional South Asian unit, still quoted daily alongside grams in the Gulf because of the size of the expatriate market. One troy ounce is a little under two and two-thirds tola.
- Pennyweight (1.5552 g) — used by scrap buyers and some jewellers in the United States. Twenty pennyweight make one troy ounce. If a US buyer quotes "per pennyweight", multiply by 20 to compare against a per-ounce figure.
Switching units in the calculator converts the weight for you, so a figure entered in tola and a figure entered in grams give the same answer.
Making charges in the Gulf, and how to read a quote
In a Gulf gold shop the price splits cleanly in two, and understanding the split is most of what protects you.
The gold value is not negotiable. It comes from the international spot price, and in the UAE the Dubai Gold & Jewellery Group publishes the reference rate that licensed retailers display. Every shop on the street is selling the metal at essentially the same price.
The making charge is negotiable, and it is where shops differ. Called ujrah or مصنعية, it covers labour, design and finishing. It is quoted two ways, and this calculator handles both:
- As a percentage of the gold value — the usual method for plain and machine-made pieces.
- As a flat amount per gram — common for simple chains and bangles.
Ranges run from roughly 3% for a plain machine-made chain, through 8–15% for standard necklaces and earrings, to 20% and beyond for intricate handmade or antique work. Investment bars and coins carry minimal or no making charge at all, which is exactly why they are the cheaper way to hold gold rather than wear it.
Two habits are worth having. First, ask for the making charge as a separate line — in Dubai, itemising it on the receipt is a consumer-protection requirement, not a courtesy. Second, compare the same piece across two shops on the making charge alone, since the gold component will be identical.
VAT on gold in the Gulf and sales tax in the US
Tax is where the same purchase differs most between markets.
In the UAE, investment-grade gold — 99% purity or higher, in tradable bullion form — is zero-rated. Jewellery is standard-rated at 5%. Saudi Arabia applies 15%, and Qatar, Bahrain and Oman apply 5%. Kuwait currently has no VAT.
Here the sources genuinely disagree, and it is worth saying so plainly. Some published guides state that the 5% applies only to the making charge because the gold itself is exempt; others compute it on the gold and the making charge together. On a 25 gram purchase that difference is several hundred dirhams, so this calculator gives you the choice under More Options rather than burying an assumption. The default applies VAT to the full amount, which is the more cautious reading for a standard-rated supply, and the alternative is one click away.
In the United States, there is no VAT and sales tax is set at state level. Many states exempt investment bullion above a threshold while taxing jewellery normally, and the rules vary enough that the tax field defaults to whatever you enter rather than guessing. Tourists leaving the UAE can reclaim most of the VAT on jewellery through the refund scheme at the airport, subject to a minimum spend.
None of this is tax advice, and the treatment of a specific item depends on its form, purity and where it is sold. Use the figure as an estimate and check the invoice.
Selling scrap gold, and why offers come in below melt
If you are selling rather than buying, the number that matters is what a buyer will hand over, and it is always below melt.
That gap is not necessarily a rip-off. A scrap buyer has to refine the metal, carry the price risk between buying from you and selling on, and make a margin. Offers commonly land between 60% and 90% of melt, with the higher end reserved for larger quantities and competitive local markets.
The scrap tab turns a percentage offer into a cash figure and shows the gap. That gap is the useful number: knowing that a 75% offer on a 20 gram 14K lot leaves a specific amount on the table tells you whether a second quote is worth the trip. Three things reliably improve the offer — separating your items by karat before you go, so the buyer cannot price everything at the lowest purity; getting more than one quote; and weighing the pieces yourself first, in grams, so the number on their scale is one you can check.
What this calculator does not cover
- Stones and non-gold components. Weight entered here is treated as gold. Diamonds, gemstones and clasps have their own value and their own weight, and both distort the figure.
- Numismatic or antique premium. A rare coin or a signed antique piece can be worth far more than its metal, and this page only sees the metal.
- Dealer spread on bullion. Bars and coins sell above spot and are bought back below it; the size of that spread depends on the product and the dealer.
- Import duty. Bringing gold across a border can attract duty and allowances — India's rules on returning residents are a common example — and none of that is modelled.
- Whether the stamp is honest. The calculation assumes the purity you enter is the purity you have.
Frequently asked questions
How is the value of my gold calculated?
Take the live spot price per troy ounce, divide by 31.1035 to get a price per gram of pure gold, multiply by the purity of your item, then multiply by its weight in grams. A 10 gram 21K piece with gold at $2,400 an ounce contains 8.75 grams of pure gold, worth about $675. That figure is the melt value — the metal content alone, before any making charge, dealer margin or tax.
What is the difference between 24K, 22K, 21K and 18K?
Karat measures how much of the alloy is gold, out of 24 parts. 24K is essentially pure and too soft for most jewellery. 22K is 91.6% and carries the 916 hallmark, favoured across South Asia and by South Asian communities in the Gulf. 21K is 87.5%, stamped 875, and is the everyday standard in Saudi Arabia and the UAE. 18K is 75%, stamped 750, and dominates in Europe and for stone-set pieces. In the United States 14K is the most common jewellery purity.
What are making charges and are they negotiable?
Making charges, called ujrah or مصنعية in the Gulf, cover the labour and design that turned raw gold into a finished piece. They are quoted either as a percentage of the gold value or as a flat amount per gram, and both are in common use in the Dubai souks. Ranges run from around 3% for a plain machine-made chain to well over 20% for intricate handmade work. Unlike the gold rate itself, which is set centrally and identical across shops, making charges are set by the shop and are widely negotiated.
Does VAT apply to gold in the UAE and Saudi Arabia?
Investment-grade gold of 99% purity or higher in tradable bullion form is zero-rated for UAE VAT. Jewellery is a standard-rated supply at 5%, and in Saudi Arabia the standard rate is 15%. Published sources disagree on whether the 5% applies to the whole invoice or only to the making charge, so this calculator lets you choose which base to use and shows the difference, which on a typical 25 gram purchase is several hundred dirhams. Treat the result as an estimate and check the invoice.
How many grams are in a tola?
One tola is 11.6638 grams. It remains a common trading unit across South Asia and among Gulf expatriate communities, so gold rates in Dubai are frequently quoted per tola alongside per gram. Select tola in the unit dropdown and the calculator converts it for you. For reference, a troy ounce is 31.1035 grams, so one troy ounce is a little under two and two-thirds tola.
Why does a jeweller offer me less than this calculator shows?
Because melt value is what the metal is worth, not what a buyer will pay for it. A scrap buyer has to refine the metal, carry the price risk until they sell, and make a margin, so offers commonly land somewhere between 60% and 90% of melt depending on quantity and how competitive your local market is. The scrap tab lets you enter an offered percentage and see the gap in cash terms, which is the number worth taking to a second buyer before you accept.
These results are estimates for general information only and are not financial, investment or tax advice. Live spot prices and exchange rates are supplied by third-party feeds, may be delayed, and are not dealing prices — no transaction can be executed at them. Melt value excludes stones, dealer premiums and spreads, and any retail or buyback price will differ. VAT and sales-tax treatment depends on the form and purity of the item and on where it is sold; confirm the position with the retailer or a qualified tax adviser before relying on any figure here.