Know about Retirement Planning and the best time to start making investments for a steady stream of money after retirement.
Invest in GOLD and give a boost to your investment portfolio
Smartest investment and life plans in UAE
Gold has immense importance in several cultures where it is offered to the lords and different demigods. Newlyweds are often gifted gold jewellery as they believed that gold is the carrier of good luck and fortune.
Many people tend to spend hours choosing the best design of jewellery but never enquire how actually the price for gold jewellery is determined. Consumers should be aware of all the aspects of their purchase whether it’s the pricing, marketing or post-sales services. Currently, there is no standard pattern for setting the pricing quotient of gold and its products. Different cities in the UAE have different jewellery associations and the pricing is declared by these associations based on the international gold price on a given day.
Today in this article we will be decoding how gold and its products are actually priced and what are the various factors that affect the price of gold.
The price of gold jewellery is comprised of two components. The first component is the value of gold that is present in the given piece of jewellery. The second component is the making charges of the jewellery. Both the components when put together provide the total amount for the given piece of jewellery.
The first component i.e. the total value of gold is determined by multiplying the current gold rate in the UAE for 1 gram with the total weight of the jewellery.
The second component i.e. the making charges usually accounts for about 15 to 25% of the total price of the jewellery. Gold after extraction goes through multiple processes after which makers put in their valuable effort to bring out the real beauty as a piece of jewellery.
The example quoted below will help you to understand the mechanism of pricing gold jewellery-
Suppose if a jeweller quotes a price of AED 600 for 10 grams of 22k gold depending on the current gold rate in the UAE.
Now if you want to purchase a necklace of 9.6 grams then price can be calculated.
Price of 1 gram of gold= AED 600 divided by 10 grams i.e. AED 60
Price of 9.60 grams necklace= AED 60 multiplied by the weight of jewelry .i.e. 60*(9.6) = AED 576/-
Add making charges, i.e. 15% of the total price – 15*(576)/100= AED 84.6
Total price of the jewelry= 576+84.6+ taxes= AED 660.6+ taxes
The final billing amount will be (576+84.6+33.03= 693.63)
Since UAE has recently introduced VAT or value-added tax on gold and its products now all the products are subjected to the taxation of 5% that is the lowest VAT charged on gold in the entire world.
The example above clearly explains how the price of jewellery is calculated in the UAE. The price of jewellery is completely dependent on the current gold rate in the UAE.
Wrapping it up
The price of gold and its products depends on multiple factors like gold exchange-traded funds also known as gold ETFs and the relationship between AED and USD. Consumers should always cross-check the current gold rate in the UAE and purity of the gold before purchasing. The standard method of calculating the price of gold jewellery has been covered in the article.