The Published Rate Is Not the Buying Rate
When you see ₹7,200 per gram quoted in the news or on a financial website, that figure refers to 999-purity (24-karat) gold at the IBJA wholesale rate. It is the price at which bullion dealers trade large volumes of pure gold between themselves — not the price a retail seller with 22-karat jewellery will receive.
A legitimate gold buyer in Madurai converts that published rate to the purity of your piece first. For 916 (22-karat) gold: ₹7,200 × 0.916 = ₹6,595 per gram. For 750 (18-karat) gold: ₹7,200 × 0.750 = ₹5,400 per gram. This purity conversion alone accounts for a large share of the gap between what you see online and what you receive.
The Buyer's Margin and What Is Normal
After adjusting for purity, the buyer applies their operating margin. Organised gold buyers in Madurai typically charge 2–5% below the purity-adjusted rate. This margin covers operational costs — XRF equipment, staff, office, and profit. A margin of 3% on a ₹6,595 rate leaves the seller with approximately ₹6,397 per gram, which is entirely normal and transparent.
The concern arises when buyers take an undisclosed margin of 8–12% through misleading purity assessments, inflated stone deductions, or rigged weighing machines. These practices are the actual problem, not the existence of a margin itself.
Quick check: Ask the buyer to write down: (1) today's IBJA rate, (2) the purity they tested your gold at, (3) the weight after deductions, and (4) the offer per gram. Multiply (1) by (2) and compare to (4). The difference should be 2–5%. If it is more than 7%, ask for an explanation.
Common Deductions and Whether They Are Legitimate
Stone deductions: Legitimate. Stones, enamel, and clasps are not gold and should be deducted from the total weight. Ask the buyer to show you the stone weight they are deducting — it should be visible on a calibrated scale, not estimated. Melting or refining charge: Sometimes legitimate, sometimes inflated. A small deduction (0.5–1%) for melting costs is common; a 3–5% "refining" charge on hallmarked jewellery is excessive. Purity downgrade: Illegitimate when unsupported by evidence. If a buyer claims your 916-hallmarked piece is actually 875 purity without showing you an XRF reading, walk away.
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