Walking into a gold buyer's shop without knowing the approximate value of your gold is one of the most common mistakes sellers make. When you know how to calculate your gold's value, you can immediately spot if a buyer is offering you a fair price or trying to shortchange you. This guide gives you the exact formula, worked examples, and practical tips to calculate your gold's worth before visiting any buyer in Chennai.
The Gold Valuation Formula
The formula to calculate your gold's value is straightforward once you understand each component.
Value = Weight (in grams) x Purity Factor x Today's Market Rate per Gram - Buyer's Margin
Let us break down each component.
Weight: The total weight of your gold in grams - Purity Factor: The percentage of pure gold (0.9167 for 22K, 0.75 for 18K, 0.585 for 14K) - Market Rate: Today's 24K gold rate per gram from MJDTA - Buyer's Margin: The per-gram deduction the buyer charges (Rs 20-50 at MSR vs Rs 200-500 at others)
Step 1: Know the Weight of Your Gold
The first thing you need is the accurate weight of your gold in grams. If you do not have a jeweller's scale at home, here are some ways to estimate.
Kitchen scales: Digital kitchen scales can give you a rough estimate, though they may not be as precise as jeweller scales - Original bill: If you have the purchase receipt, the weight will be mentioned (remember to subtract stone weight if applicable) - Jeweller check: Visit any jeweller and ask them to weigh your gold, many will do this for free
Common weight conversions used in Chennai and Tamil Nadu.
1 Sovereign (Savaran) = 8 grams - 1 Tola = 11.66 grams - 1 Pavan = 8 grams (same as sovereign in Tamil Nadu) - 1 Troy Ounce = 31.1 grams
Step 2: Determine the Purity
The purity of your gold directly affects its value. Check for hallmark stamps on your jewellery.
999 or 24K: 99.9% pure gold (purity factor 0.999) - 916 or 22K: 91.67% pure gold (purity factor 0.9167) - 750 or 18K: 75% pure gold (purity factor 0.75) - 585 or 14K: 58.5% pure gold (purity factor 0.585)
If your jewellery does not have a hallmark, do not worry. MSR Jewellery provides free XRF testing that determines the exact purity in seconds. Some older jewellery may also be slightly above or below the standard karat purity, and XRF testing will reveal the precise percentage.
Step 3: Check Today's Market Rate
The MJDTA (Madras Jewellers and Diamond Traders Association) publishes the daily gold rate for Chennai. You can check the live rate at cashforgold.cc, which is updated every minute during market hours.
For calculation purposes, you need the 24K rate per gram. If only the 22K rate is available, you can calculate the 24K rate by dividing the 22K rate by 0.9167.
Step 4: Calculate with Real Examples
Let us work through three common scenarios using a hypothetical 24K rate of Rs 7,500 per gram.
Example 1: Selling a 22K Gold Chain (15 grams)
Weight: 15 grams - Purity Factor: 0.9167 (22K) - Market Rate: Rs 7,500 per gram (24K) - Value before margin: 15 x 0.9167 x 7,500 = Rs 1,03,128 - At MSR (Rs 30 margin): Rs 1,03,128 - (15 x 30) = Rs 1,02,678 - At TV advertiser (Rs 300 margin): Rs 1,03,128 - (15 x 300) = Rs 98,628 - You save Rs 4,050 by choosing MSR Jewellery
Example 2: Selling 18K Diamond Jewellery (25 grams total, 20 grams gold after stone deduction)
Net gold weight: 20 grams (after removing stone weight) - Purity Factor: 0.75 (18K) - Market Rate: Rs 7,500 per gram (24K) - Value before margin: 20 x 0.75 x 7,500 = Rs 1,12,500 - At MSR (Rs 30 margin): Rs 1,12,500 - (20 x 30) = Rs 1,11,900 - At TV advertiser (Rs 300 margin): Rs 1,12,500 - (20 x 300) = Rs 1,06,500 - You save Rs 5,400 by choosing MSR Jewellery
Example 3: Selling 1 Sovereign (8 grams) of 22K Gold
Weight: 8 grams (1 sovereign) - Purity Factor: 0.9167 (22K) - Market Rate: Rs 7,500 per gram (24K) - Value before margin: 8 x 0.9167 x 7,500 = Rs 55,002 - At MSR (Rs 30 margin): Rs 55,002 - (8 x 30) = Rs 54,762 - At TV advertiser (Rs 300 margin): Rs 55,002 - (8 x 300) = Rs 52,602 - You save Rs 2,160 by choosing MSR Jewellery
How Stones and Making Charges Are Handled
When selling gold jewellery with stones (diamonds, rubies, emeralds, etc.), the stones are separated from the gold valuation.
Precious stones: Diamonds and precious gems may have independent value that some buyers will pay for separately - Semi-precious stones: These typically have minimal resale value and are usually returned to you - Making charges: You do not get back making charges when selling gold. The value is purely based on gold content by weight and purity - Stone weight: Reputable buyers weigh the jewellery, then deduct the estimated stone weight to calculate the net gold weight
At MSR Jewellery, the process is transparent. We weigh your jewellery on a BIS-certified electronic scale in front of you, test the purity with XRF, and clearly explain any deductions for stones before giving you the final amount.
How to Verify the Buyer's Calculation
When a buyer gives you a quote, you should be able to verify it using the formula above. Here is a checklist.
Ask for the exact weight used in the calculation and verify it matches the scale reading - Ask what purity they are using and verify it matches the XRF or hallmark reading - Ask what market rate they are using and compare it to the live MJDTA rate - Calculate the margin by subtracting their offered per-gram rate from the MJDTA rate - If any number does not match, ask the buyer to explain the discrepancy
Red Flags to Watch For
Be cautious of buyers who exhibit these behaviours.
Refusing to show you the weight on the scale - Not performing any purity test or rushing through it - Quoting a per-gram rate without specifying the purity they are using - Applying excessive deductions for wastage or melting loss - Pressuring you to sell immediately without giving you time to compare
Use Our Online Calculator
Before visiting any gold buyer, use the interactive calculator at cashforgold.cc to get an instant estimate of your gold's value. Simply enter the weight, select the purity, and the calculator uses the live MJDTA rate to show you the approximate value. This way, you walk into any buyer's shop armed with knowledge.
Ready to sell? Call MSR Jewellery at 63690 25876 or visit cashforgold.cc/contact/city to start the process. We guarantee the highest rate in Chennai with our Rs 15,000 challenge.