How a jeweller tests and values old gold, the deductions to expect, exchange versus selling for money, and the papers to carry.
Many families have old gold lying in a locker: broken chains, single earrings, out-of-fashion bangles. You can sell it for money or exchange it for new jewellery. Either way, knowing how shops value old gold helps you get a fair price.
Step 1: The shop tests the purity
The shop has to find out how much pure gold is inside. Common methods:
- Hallmark check: if the item has a valid hallmark and HUID, the purity is already known.
- Karat meter (XRF machine): a quick test that reads the surface without damaging the item.
- Touchstone and acid: a traditional test where the item is rubbed on a stone. It leaves a tiny mark on the item.
- Melting: for an exact result, the item is melted and tested. You get paid on the result, but the item is gone, so agree on this first.
Ask to see the karat meter reading yourself.
Step 2: The shop works out the value
A simple version of the calculation:
- Net weight of gold (after removing stones, dirt, hooks or threads)
- × purity (for example 91.6% for 22K)
- × the shop's buying rate for pure gold
- − any deduction the shop applies
Example: a 10-gram 22K chain, purity confirmed at 91.6%, buying rate ₹14,000 per gram of pure gold: 10 × 0.916 × 14,000 = ₹1,28,240, before deductions.
Deductions to expect
Shops often deduct a small percentage for melting loss or their margin. The amount varies, from very little for hallmarked gold at the shop where you bought it, to several percent for unknown, unmarked gold. Ask for the deduction as a number before you agree.
Exchange or sell for money?
| Exchange for new jewellery | Sell for money | |
|---|---|---|
| Rate offered | Often better, as the shop also earns from the new sale | Often a little lower |
| What you pay | New item's price minus old gold value, plus making charges on the new item | Nothing; you receive money |
| Best when | You want new jewellery anyway | You need money |
Papers to carry
- The original bill, if you have it. It proves ownership and can get you a better rate.
- An ID proof, and your PAN card for larger amounts.
- Bank details, since large amounts are usually paid by bank transfer, not cash.
Tips for a fair deal
- Check today's 24K and 22K rate on this site before you go.
- Get quotes from two or three shops; the rates can differ.
- Hallmarked gold usually gets the best value. See BIS hallmark and HUID.
- Remember that making charges you paid earlier are not returned. Only the gold is valued.
- Don't sell in a hurry to the first buyer who stops you outside a shop or calls you. Use established, registered shops.
Common questions
Can I sell gold without the original bill?
Usually yes, with a valid ID. Without a bill the shop will test the gold more carefully and may offer a slightly lower rate. Family jewellery passed down over generations rarely has bills, and shops are used to that.
Do banks buy back gold coins?
Most banks sell gold coins but do not buy them back. You can sell bank coins to jewellers or bullion dealers, who will test and value them like any other gold.
Should I sell or take a gold loan?
If you need money for a short time and want to keep the jewellery, some people take a gold loan from a bank or a regulated lender instead of selling. Compare the interest rate, fees and what happens if you can't repay before deciding.
Is it better to sell when the price is high?
A higher rate means more money for the same gold, but nobody can reliably predict tomorrow's price. Watch the 7, 30 and 90-day charts on your city page to see where today's price sits.
This guide is general information for buyers. Rules and tax rates can change; check with your jeweller, bank or a qualified adviser before big decisions.