How gold prices are set in India: 22K vs 24K, hallmarks and what to check before buying

Short answer: the gold price in India depends mainly on the international gold price, the rupee-dollar exchange rate, import duty and taxes, and demand at home. Many jewellers start from the daily reference rate published by the India Bullion and Jewellers Association (IBJA) and add local costs. When you buy jewellery, check the carat, the BIS hallmark, the six-character HUID and the making charge on the bill.

Why does the gold price change every day?

India imports most of the gold it uses, so the price here rests on four things:

• International price: gold is traded worldwide in US dollars per troy ounce. When that price rises, the Indian price follows.
• Rupee-dollar rate: a weaker rupee makes the same gold costlier in rupees, even if the world price has not moved.
• Import duty and taxes: the government charges duty on gold imports, and GST applies on sales. A duty change in the Budget shows up in prices at once.
• Demand: demand rises in the wedding and festival seasons. Global uncertainty (wars, recession fears) also pushes people towards gold.

Many jewellers use the IBJA's daily rates as a base and add local costs and margin, which is why rates in Delhi, Mumbai, Ahmedabad or Patna differ slightly.

What is the difference between 24, 22 and 18 carat?

Carat measures purity: the higher the carat, the purer the gold.

Carat	Purity	Hallmark number	Common use
24K	99.9% / 99.5%	999 (coins, bars) · 995 (jewellery)	Coins, bars
22K	91.6%	916	Most jewellery
18K	75%	750	Jewellery with diamonds or stones
14K	58.5%	585	Light, durable jewellery

Pure gold is very soft, so jewellery is usually 22K or 18K: other metals such as copper or silver are mixed in to make it stronger. Note that 999 fineness is typical of coins and bars; 24K jewellery hallmarks carry the purity grade 995.

How is the price of a piece of jewellery calculated?

Shops usually display the price for 10 grams. A jewellery bill is built roughly like this:

1. Gold value = weight (grams) × the per-gram rate for that carat
2. Making charge = the cost of crafting, charged per gram or as a percentage
3. GST = 3% on gold; tax should appear separately on the bill

Example (illustrative rate): if 24K gold is ₹1,00,000 for 10 grams, 22K is about ₹91,600 (1,00,000 × 0.916). So the gold value of a 10-gram 22K piece is about ₹91,600, before making charge and tax.

The older unit tola is still used: one tola is about 11.66 grams, not 10. Check the unit when comparing rates.

How do I check the hallmark and HUID?

Under Bureau of Indian Standards (BIS) rules, in districts where hallmarking is mandatory, gold jewellery may be sold only with a hallmark carrying a six-character HUID since 1 April 2023. There are exemptions, such as very light items (under 2 grams). The HUID is a unique alphanumeric code for each piece. The hallmark has three parts:

You can verify a HUID with the "Verify HUID" option in the BIS CARE app from the Bureau of Indian Standards. It shows the type of article, its purity and the hallmarking centre.

What should I check before buying gold?

1. Check that day's rate and compare two or three shops.
2. Ask for the carat and look at the hallmark — 22K jewellery should be marked 916.
3. Verify the HUID in the app, especially for costly pieces.
4. Negotiate the making charge; it varies a lot between shops.
5. Get stones weighed separately, so you don't pay the gold rate for them.
6. Insist on a proper bill listing weight, carat, rate, making charge and tax separately.
7. Ask about buyback and exchange terms — how much is deducted when you trade in old jewellery.
8. Buying only as an investment? Coins or bars usually work out better than jewellery, as the making charge is lower.

How is the silver price set?

Silver also follows the international market and the rupee, but industrial demand (electronics, solar panels) plays a big part too. Silver is usually quoted per kilogram and swings more than gold.

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