Gold Value Calculator for Pawn Brokers — Complete Guide
This free gold value calculator is designed for pawn brokers, gold finance companies, jewellers, and NBFCs across India. It calculates the precise market value of pledged gold based on today's gold rate, the weight of the gold in grams, and its karat purity — giving you an accurate gold valuation in seconds.
How to Calculate the Value of Gold
The gold value formula used by pawn brokers in India is straightforward:
Example: 20 grams of 22K gold at ₹5,693/gram
Gold Value = 20 × 5,693 × (22 ÷ 24) = 20 × 5,693 × 0.9167 = ₹1,04,437
After calculating the gross gold value, pawn brokers typically deduct making charges or wastage (usually 2%–8%) before determining the net pledgeable value. The maximum loan is then calculated as a percentage of this net value — 75% as per RBI guidelines.
Gold Purity in India — Karat System Explained
Gold purity in India is measured using the karat system. Here is what each karat means and where it is commonly found:
| Karat | Purity % | Common Use | Rate Relative to 24K |
|---|---|---|---|
| 24 Karat (24K) | 99.9% | Gold coins, gold bars, investment gold | 100% |
| 22 Karat (22K) | 91.67% | Gold jewellery (most common in India) | 91.67% |
| 18 Karat (18K) | 75.0% | Designer jewellery, studded pieces | 75.0% |
| 14 Karat (14K) | 58.33% | Western-style jewellery, export pieces | 58.33% |
Hallmark tip: Since September 2021, BIS (Bureau of Indian Standards) hallmarking is mandatory for all gold jewellery sold in India. A hallmarked piece shows the karat purity, the BIS logo, and the year of hallmarking. Always check the hallmark before accepting gold as collateral.
Gold Rate Today in India — How It is Determined
The gold rate in India is determined by two primary factors: the international gold price (set on the London Bullion Market in USD per troy ounce) and the USD to INR exchange rate. Additionally, import duty, GST, and local market demand affect the final retail gold price in Indian cities.
Gold rates differ slightly across cities. Rates in Chennai, Coimbatore, and Madurai may differ from Mumbai or Delhi by ₹50–₹200 per gram due to local market conditions and transportation costs. Pawn brokers should always use the prevailing local gold rate when calculating loan eligibility.
Gold Valuation by Weight — Pawn Broker Reference
Here are the approximate values for common gold weights pledged at pawn broking shops across Tamil Nadu and South India, calculated at 22 karat purity:
| Gold Weight | 22K Market Value | Max Loan (75% LTV) | Max Loan (70% LTV) |
|---|---|---|---|
| 2 grams | ₹10,438 | ₹7,829 | ₹7,307 |
| 5 grams | ₹26,094 | ₹19,571 | ₹18,266 |
| 10 grams | ₹52,188 | ₹39,141 | ₹36,532 |
| 15 grams | ₹78,281 | ₹58,711 | ₹54,797 |
| 20 grams | ₹1,04,375 | ₹78,281 | ₹73,063 |
| 25 grams | ₹1,30,469 | ₹97,852 | ₹91,328 |
| 50 grams | ₹2,60,938 | ₹1,95,703 | ₹1,82,656 |
| 100 grams | ₹5,21,875 | ₹3,91,406 | ₹3,65,313 |
* Values based on 22K gold at approximately ₹5,693/gram. Actual values vary daily with gold market rates.
Why Gold Valuation Accuracy Matters for Pawn Brokers
Accurate gold valuation is the foundation of a healthy pawn broking business. Overvaluing gold leads to loans exceeding the collateral value — creating a direct financial risk if the customer defaults and the gold has to be auctioned at a loss. Undervaluing gold means turning away eligible customers or issuing smaller loans than competitors, reducing your business volume.
Dedicated gold loan management software like FinAccSaaS auto-updates gold rates daily, calculates gold value automatically at the time of pledge, and records the complete valuation history for each loan account — eliminating manual valuation errors entirely.
Gold Valuation by Weight — Gram-wise Pages
Need detailed information for a specific gold weight? Visit our dedicated pages: