11/02/2025
๐๐ก๐ ๐๐ข๐๐๐๐ง ๐๐จ๐ฌ๐ญ๐ฌ ๐จ๐ ๐๐ฎ๐ฒ๐ข๐ง๐ ๐๐จ๐ฅ๐ ๐๐๐ฐ๐๐ฅ๐ซ๐ฒ ๐ข๐ง ๐๐๐ค๐ข๐ฌ๐ญ๐๐ง: ๐๐ก๐๐ญ ๐๐จ๐ฎ ๐๐๐๐ ๐ญ๐จ ๐๐ง๐จ๐ฐ
Gold has always been an integral part of Pakistani culture. Whether itโs for weddings, gifts, or investment purposes, buying gold jewelry is a deeply rooted tradition. However, most people in Pakistan are unaware of the hidden costs associated with purchasing gold jewelry, which can significantly impact their investment returns.
In this article, we will explore a crucial yet often overlooked fact: the gold jewelry available in Pakistan is not 24-carat gold; it is primarily 21-carat gold. Despite this difference in purity, consumers end up paying a much higher price than they should, ultimately making gold jewelry a costly investment.
๐๐จ๐ฅ๐ ๐๐๐ฐ๐๐ฅ๐ซ๐ฒ ๐ข๐ง ๐๐๐ค๐ข๐ฌ๐ญ๐๐ง: ๐๐จ๐ญ ๐๐-๐๐๐ซ๐๐ญ, ๐๐ฎ๐ญ ๐๐-๐๐๐ซ๐๐ญ
A common misconception among buyers is that the gold jewelry they purchase is of the highest purityโ24-carat gold (which is 99.99% pure). However, it is technically impossible to make jewelry in 24-carat gold due to its extreme softness, which makes it impractical for crafting intricate designs.
As a result, all gold jewelry available in Pakistan is made from 21-carat gold, which has a purity of only 87.5%. Despite this lower purity, most consumers unknowingly pay a price that is nearly the same as 24-carat gold.
๐ก ๐๐ก๐๐ญ ๐๐๐ซ๐๐๐ ๐๐ฌ๐ฌ๐จ๐๐ข๐๐ญ๐ข๐จ๐ง ๐๐จ๐ฅ๐ ๐๐ฌ:
According to Sarafa Association representatives, only 1% of their customers buy 24-carat gold bars. The remaining 99% of buyers purchase gold in the form of 21-carat jewelry. This is because 24-carat gold bars are not readily available, and jewelers prefer selling 21-carat gold due to its significantly higher profit margins.
๐๐ก๐ ๐๐ซ๐ข๐๐ข๐ง๐ ๐๐ข๐ฌ๐๐ซ๐๐ฉ๐๐ง๐๐ฒ: ๐๐จ๐ฐ ๐๐๐ฐ๐๐ฅ๐๐ซ๐ฌ ๐๐๐ค๐ ๐ ๐๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐% ๐๐ซ๐จ๐๐ข๐ญ
The Sarafa Association and Gold Bullion Association of Pakistan set daily gold rates based on international market trends. However, the price of 21-carat gold in Pakistan is artificially inflated by at least 10% compared to its actual value.
๐๐ง๐๐๐ซ๐ฌ๐ญ๐๐ง๐๐ข๐ง๐ ๐ญ๐ก๐ ๐๐๐ญ๐ก: ๐๐ก๐๐ญ ๐๐จ๐ฎ ๐๐ก๐จ๐ฎ๐ฅ๐ ๐๐ ๐๐๐ฒ๐ข๐ง๐ ๐ฏ๐ฌ. ๐๐ก๐๐ญ ๐๐จ๐ฎ ๐๐๐ญ๐ฎ๐๐ฅ๐ฅ๐ฒ ๐๐๐ฒ
Letโs assume the price of 24-carat gold is Rs. 100,000 per tola. Based on purity, the price of 21-carat gold should be Rs. 87,500 per tola (since it is only 87.5% pure).
However, in Pakistan, the quoted price of 21-carat jewelry is almost the same as 24-carat gold, with only a small 2-2.5% difference.
๐น ๐๐ก๐๐ญ ๐ญ๐ก๐ข๐ฌ ๐ฆ๐๐๐ง๐ฌ ๐๐จ๐ซ ๐ฒ๐จ๐ฎ: Instead of paying Rs. 87,500 per tola for 21-carat gold, you are charged around Rs. 98,000 - Rs. 99,000. This extra 10% directly goes into the fixed profit margins of jewelers, making it an unavoidable cost for buyers.
๐๐ก๐ ๐๐๐๐ข๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ข๐๐๐๐ง ๐๐จ๐ฌ๐ญ๐ฌ: ๐๐๐ค๐ข๐ง๐ ๐๐ก๐๐ซ๐ ๐๐ฌ, ๐๐จ๐ฅ๐ข๐ฌ๐ก๐ข๐ง๐ , ๐๐ง๐ ๐๐๐ฌ๐ญ๐๐ ๐ ๐
๐๐๐ฌ
Beyond the inflated price of 21-carat gold, there are additional charges that make gold jewelry even more expensive:
๐น ๐๐๐ค๐ข๐ง๐ ๐๐ก๐๐ซ๐ ๐๐ฌ: Typically 5-10% of the jewelryโs price.
๐น ๐๐จ๐ฅ๐ข๐ฌ๐ก๐ข๐ง๐ & ๐
๐ข๐ง๐ข๐ฌ๐ก๐ข๐ง๐ ๐
๐๐๐ฌ: Another 2-5% of the total cost.
๐น ๐๐๐ฌ๐ญ๐๐ ๐ ๐๐ก๐๐ซ๐ ๐๐ฌ: Can range from 5-7%, depending on the complexity of the design.
In total, buyers end up paying atleast 25% more than the actual value of the gold they are purchasing.
๐๐ก๐ ๐๐๐ฌ๐๐ฅ๐ ๐๐๐๐ฅ๐ข๐ญ๐ฒ: ๐๐ก๐ฒ ๐๐จ๐ฅ๐ ๐๐๐ฐ๐๐ฅ๐ซ๐ฒ ๐ข๐ฌ ๐ ๐๐๐ ๐๐ก๐จ๐ซ๐ญ-๐๐๐ซ๐ฆ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ
Many people buy gold jewelry thinking of it as a safe investment, assuming they can sell it later at a profit. However, the moment you step out of the jewelry shop, your goldโs resale value drops significantly.
When you sell gold jewelry, you will not get back the making charges, polishing fees, or wastage costs. Additionally, because you already paid 10% extra due to price inflation, your losses are compounded.
๐น ๐๐ซ๐๐๐ค-๐๐ฏ๐๐ง ๐๐๐ฅ๐๐ฎ๐ฅ๐๐ญ๐ข๐จ๐ง:
To recover the costs of buying gold jewelry, you need gold prices to increase by at least 33-40% before you can even break even. This can take months or even years, depending on market trends.
๐๐ก๐ ๐๐ข๐๐๐ข๐๐ฎ๐ฅ๐ญ๐ฒ ๐จ๐ ๐๐ฎ๐ฒ๐ข๐ง๐ ๐๐ง๐ ๐๐๐ฅ๐ฅ๐ข๐ง๐ ๐๐-๐๐๐ซ๐๐ญ ๐๐จ๐ฅ๐ ๐๐๐ซ๐ฌ ๐ข๐ง ๐๐๐ค๐ข๐ฌ๐ญ๐๐ง
While 24-carat gold bars are the best way to invest in gold, they are not easily available in Pakistan. The reason? Jewelry shopkeepers donโt prefer selling 24-carat gold bars because their profit margins are too low.
๐ก ๐๐๐ซ๐ค๐๐ญ ๐๐๐๐ฅ๐ข๐ญ๐ฒ:
- The spread (profit margin) on 21-carat gold is around 10%.
- The spread on 24-carat gold bars is less than 1%.
Since jewelers make a guaranteed 10% profit on 21-carat jewelry, they naturally push customers towards buying jewelry rather than gold bars.
๐๐ฎ๐ฒ๐ข๐ง๐ ๐๐-๐๐๐ซ๐๐ญ ๐๐จ๐ฅ๐ ๐๐จ๐ซ๐ญ๐ก ๐๐ฌ. ๐๐๐ ๐๐ข๐ฅ๐ฅ๐ข๐จ๐ง: ๐ ๐๐๐๐ญ๐ข๐ ๐๐ซ๐จ๐๐๐ฌ๐ฌ
If you decide to invest Rs. 100 million in 24-carat gold bars, you cannot buy it from a single shop. Since most jewelers donโt keep a large stock of gold bars due to low margins, you will need to visit multiple shops to accumulate even a small quantity of gold bars.
Moreover, when it comes time to sell your 24-carat gold bars, finding a buyer can be difficult. Jewelers are more interested in buying 21-carat gold because it gives them a higher profit.
๐น ๐๐๐๐ฅ๐ข๐ญ๐ฒ ๐๐ก๐๐๐ค:
- A jeweler would rather buy Rs. 10 million worth of 21-carat jewelry than Rs. 100 million worth of 24-carat gold bars because of the higher profits on jewelry.
- If you hold 24-carat gold bars, you may have to sell them to specific bullion dealers rather than jewelry shopkeepers.
๐๐จ๐ง๐๐ฅ๐ฎ๐ฌ๐ข๐จ๐ง: ๐๐ซ๐ ๐๐จ๐ฎ ๐๐๐๐ฅ๐ฅ๐ฒ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ข๐ง๐ ๐ข๐ง ๐๐จ๐ฅ๐?
Most Pakistanis believe they are making a secure investment when they buy gold jewelry. However, in reality, they are paying 25% more than the actual value of the gold and will need to wait for prices to rise by 35-40% just to break even.
If you truly want to invest in gold, avoid jewelry and opt for 24-carat gold bars. Otherwise, be prepared to pay hidden costs, jeweler profits, and resale losses before seeing any real gains.
๐ฌ ๐๐ก๐๐ญ ๐๐จ ๐ฒ๐จ๐ฎ ๐ญ๐ก๐ข๐ง๐ค? Have you ever faced these hidden costs when buying gold jewelry? Share your experiences in the comments!
๐ Stay tuned for our next article, ๐๐ก๐ ๐๐ฆ๐๐ซ๐ญ๐๐ฌ๐ญ ๐๐๐ฒ ๐ญ๐จ ๐๐ง๐ฏ๐๐ฌ๐ญ ๐ข๐ง ๐๐จ๐ฅ๐ ๐ข๐ง ๐๐๐ค๐ข๐ฌ๐ญ๐๐ง.