One of the most common questions people have before selling gold is — how exactly does the buyer arrive at the final number? Many people accept the price offered without understanding how it was calculated. This leaves room for buyers to underpay without the seller ever realising it.
Old gold buyers in madurai
Understanding the calculation is simpler than most people think. There is one formula, three inputs, and no guesswork involved. Once you know how it works, you can verify any offer in under two minutes and walk into any gold buyer’s office with complete confidence.
The Formula Every Gold Buyer Uses
Every legitimate gold buyer — whether in Madurai or anywhere in India — uses the same basic formula to calculate your payout:
Payout = Net Gold Weight (grams) x Purity Percentage x Today’s Gold Rate per gram
Each part of this formula is straightforward. Let us go through each one in detail.
Part 1 — Net Gold Weight
Weight is measured in grams using a calibrated digital scale. The key word here is net weight — meaning the weight of the gold alone, after removing any non-gold components.
If your jewellery has stones, beads, enamel coating, or metal clasps made of other materials, those are removed or accounted for before the final weight is recorded. Only the pure gold portion is weighed.
This is why a heavy-looking ornament with a large stone may weigh less in gold than a smaller plain bangle. The stone adds to the visual size but not to the gold value.
Part 2 — Purity Percentage
Purity is measured in karats. Each karat value corresponds to a fixed purity percentage:
- 24 Karat — 99.9% pure gold
- 22 Karat — 91.6% pure gold
- 18 Karat — 75.0% pure gold
- 14 Karat — 58.5% pure gold
Most Indian gold jewellery is 22 karat. Diamond-set and lightweight jewellery is often 18 karat. Gold coins and bars are typically 24 karat.
The purity percentage is multiplied against the weight to give you the effective pure gold content. For example, 10 grams of 22 karat gold contains 9.16 grams of pure gold. This is the actual gold being valued.
Part 3 — Today’s Gold Rate per Gram
The gold rate changes every single day based on international commodity markets, the US dollar exchange rate, and global demand and supply. There is no fixed rate — it must be checked fresh each day.
As of March 2026, the approximate rates in Madurai are:
- 24 Karat: around Rs. 13,650 per gram
- 22 Karat: around Rs. 13,000 per gram
- 18 Karat: around Rs. 10,200 per gram
A trustworthy buyer always applies the rate for the specific karat of your gold — not a blended or approximate rate. Always verify the rate on Google before your visit so you have an independent reference point.
Real Examples of the Calculation
Example 1 — 22 Karat Gold Jewellery
Weight: 12 grams Purity: 91.6% (22 karat) Today’s rate: Rs. 13,000 per gram
Payout = 12 x 91.6% x 13,000 = Rs. 1,42,896
Example 2 — 18 Karat Gold Jewellery
Weight: 20 grams Purity: 75% (18 karat) Today’s rate: Rs. 10,200 per gram
Payout = 20 x 75% x 10,200 = Rs. 1,53,000
Example 3 — 24 Karat Gold Coin
Weight: 5 grams Purity: 99.9% (24 karat) Today’s rate: Rs. 13,650 per gram
Payout = 5 x 99.9% x 13,650 = Rs. 68,132
These are the amounts a transparent buyer should pay — with no additional deductions beyond accounting for non-gold components.
What Should Not Appear in the Calculation
A transparent gold buyer applies only the formula above. However, some buyers add deductions that reduce your payout unfairly:
Wastage charges: A percentage deducted claiming that some gold is lost during testing or processing. This does not apply when using modern machine-based testing which is non-destructive.
Melting fees: A charge applied for melting your gold after purchase. This is the buyer’s internal cost and should never be passed on to the seller.
Testing fees: Purity testing should always be free. Any buyer who charges for testing is adding an unjustified cost.
At Yellow Gold Point in Madurai, none of these deductions are applied. Your payout is calculated purely on the formula — weight, purity, and live market rate.
Sell Your Gold at Yellow Gold Point, Madurai
Yellow Gold Point offers complete transparency in every transaction. The formula is shown to you clearly, the purity test is done in front of you, and payment is made instantly on the same visit with zero hidden deductions.
Address: 1st Floor, SMR Complex, 72/205, S Masi Street, Madurai Main, Madurai – 625001
Call: 9344307004
Walk in with your gold and a valid ID. No appointment needed.
Frequently Asked Questions
Q1. Why does my payout feel lower than the market rate I saw on Google?
The market rate shown on Google is for 24 karat pure gold. If your jewellery is 22 karat or 18 karat, the purity percentage is applied to that rate, which naturally gives a lower per gram figure. This is correct and standard — not a deduction.
Q2. Does the gold rate change while I am at the buyer’s office?
Gold rates are updated once or twice a day, not minute by minute. The rate applicable when you walk in is the rate used for your transaction. There is no mid-visit rate change to worry about.
Q3. What is the difference between the buying rate and the selling rate of gold?
The buying rate is what jewellers charge you when you purchase gold. The selling rate — what you receive when you sell — is slightly lower because it reflects the wholesale market rate. This difference is standard across all buyers and is not a deduction.
Q4. How do I verify that the buyer is using the correct gold rate?
Search the current gold rate for your karat on Google before visiting. Cross-check this with the rate the buyer applies during calculation. If both match, the transaction is fair.
Q5. Can I negotiate the gold rate when selling in Madurai?
The gold rate itself is fixed by the market and cannot be negotiated. What you can ensure is that no additional deductions like wastage or melting fees are applied on top of the formula. A transparent buyer will have no issue confirming this before the transaction.