Gold Buying Guide: Karat, Weight & Making Charges

Gold purity is measured in karats (K). Pure gold is 24K — soft and impractical for most jewellery. Lower karats mix gold with alloy metals for durability and colour.

• 24K = 99.9% gold — investment bars, some traditional jewellery • 22K = 91.6% gold — popular for traditional/Indian jewellery in Australia • 18K = 75.0% gold — standard for engagement rings and fine jewellery • 14K = 58.5% gold — durable, affordable, common in the US market • 9K = 37.5% gold — minimum purity to be called 'gold' in Australia

Higher karat means more gold content, richer colour, but also softer metal. 18K is the sweet spot for most fine jewellery — it balances purity with durability.

The intrinsic value of a gold piece is straightforward:

Intrinsic Value = Weight (grams) × Purity × Gold Spot Price per gram (AUD)

For example, a 22K gold bangle weighing 15 grams: • Purity: 0.916 • Spot price (example): $128.50/gram • Intrinsic value: 15 × 0.916 × $128.50 = $1,765.74

This is the melt value — what the gold alone is worth. The retail price will always be higher due to making charges.

Making charges (also called fabrication charges or labour charges) are the cost of turning raw gold into jewellery. They vary dramatically by piece type:

• Machine-made chains: 15–30% above melt value • Cast rings and bangles: 25–50% above melt value • Handmade/traditional pieces: 50–150% above melt value • Designer or custom pieces: 100–250%+ above melt value

A making charge of 25–40% is standard for most mass-produced gold jewellery in Australia. If a retailer's making charge exceeds 50% on a standard item, ask why — you may be paying a brand premium.

Lustrumo's Gold Calculator shows the intrinsic value alongside the estimated retail range so you can see the making charge as a percentage.

In Australia, gold jewellery should be hallmarked with its karat purity (e.g. '750' for 18K, '916' for 22K, '375' for 9K). Look for this stamp — usually on the inside of a ring band, the clasp of a chain, or the edge of a bangle.

If there's no hallmark, ask the retailer for a certificate of authenticity or have the piece tested by an independent jeweller. Acid testing and electronic gold testers are both reliable methods.

Be cautious of pieces described as 'gold-plated', 'gold-filled', or 'gold-tone' — these contain minimal actual gold.

• Always know the current spot price — check the Lustrumo Gold Calculator before you walk into a store. • Ask for the gram weight before the price. Calculate the intrinsic value yourself. • Compare making charges across retailers for equivalent pieces. • For 22K traditional jewellery, specialist South Asian jewellers often offer lower making charges than mainstream retailers. • Gold prices are quoted in AUD per troy ounce or per gram. 1 troy ounce = 31.1035 grams. • All prices in Australia must be GST-inclusive for consumer sales.