How to Calculate Your Gold Profit or Loss, with Worked Examples
The gold price has risen since you bought your piece, so have you made money? Not necessarily. Real profit is not measured by the gram price on the news but by the gap between everything you paid when you bought and what you would actually receive if you sold today.
This guide sets out the sum step by step, applies it to a 21K bracelet and a 24K bar, shows how to find your break-even price and flags the mistakes that make people think they are in profit when they are not.
Step 1: work out your full cost
Start from the invoice, not from memory. Your full cost includes:
- the gold value: weight in grams multiplied by the gram price on the day you bought;
- the making charge, if the piece is jewellery;
- the VAT you paid, which in the UAE is 5% on jewellery at the time of writing (2026);
- any other fees, such as delivery or insurance on an online order.
If you have lost the invoice, estimate from your bank statement and use the less flattering figures. Our guide on how to read a gold invoice explains each line you will find on it.
Step 2: estimate what you would really get
When you sell, the dealer does not pay you the selling price on the board; he pays his buying price, which is lower. With used jewellery the making charge and VAT are usually not refunded, and stones or wear may be deducted. So:
- confirm the net gold weight, excluding stones;
- ask for the buying price per gram for your piece’s karat, not the selling price;
- ask about any extra deductions before you agree.
Today’s reference price is on our 21K gold rate page: 1 gram of 21K is 420.71 dirhams right now, and a shop’s buying price for your gold will sit below that by a margin that varies from dealer to dealer.
Step 3: apply the formula
- Profit or loss = actual resale value − full cost.
- Return = (profit ÷ full cost) × 100.
- Break-even price per gram = full cost ÷ net weight.
A negative result is a loss, even if the gold price today is higher than on the day you bought.
Example 1: a 21K bracelet
A worked example with hypothetical round numbers, assuming the shop’s buying price later rises to 330 dirhams a gram:
| Item | Calculation | Amount (AED) |
|---|---|---|
| Gold value at purchase | 20 g × 300 | 6,000 |
| Making charge | 20 g × 40 | 800 |
| VAT | 5% × 6,800 | 340 |
| Full cost | Total | 7,140 |
| Resale value later | 20 g × 330 | 6,600 |
| Result | 6,600 − 7,140 | Loss of 540 |
Even though the gram price rose 10% in this example, the owner is still down, because the making charge and VAT were part of the cost and do not come back on resale. To break even, the shop would need to pay 7,140 ÷ 20 = 357 dirhams a gram, roughly 19% above the original price. Our guide to gold making charges explains why that charge matters so much.
Example 2: a 24K bar
Bars carry a smaller premium over their gold value, and in the UAE investment gold of 99% purity or more is zero-rated for VAT under certain conditions. A hypothetical example:
- buy a 100 g bar at 350 dirhams a gram plus a 3-dirham premium: cost 35,300 dirhams;
- sell it later at a buying price of 378 dirhams a gram: 37,800 dirhams;
- profit: 37,800 − 35,300 = 2,500 dirhams, about 7.1% of the cost.
The bar moves into profit sooner because so little of its cost sits above the value of the metal itself.
Put the return in context
A 7% gain over one year is not the same as 7% over five. For a rough comparison, divide the percentage by the number of years for a simple annual average: 20% over four years is about 5% a year, slightly less on a compound basis. Remember too that gold pays no income, and any storage or insurance costs reduce your net result.
Common mistakes
- Comparing today’s selling price on the board with your old purchase price, instead of comparing the dealer’s buying price with your full cost.
- Forgetting the making charge and VAT, or weighing the piece with its stones.
- Mixing karats, such as applying the 24K price to a 21K piece.
- Ignoring exchange rates if you bought in a currency that is not pegged to the dollar. The dirham and the Saudi riyal are both pegged, so converting between them does not change the result.
To speed things up, use our gold profit calculator with your weight, karat, purchase price and making charge. This is general information, not financial advice.
Frequently asked questions
Do I get the making charge back when I sell jewellery?
Usually not. Dealers buy used gold by weight and karat. Some may pay a little more for recent or branded pieces, but do not expect the making charge back in full.
Does the calculator show the price I will actually get?
It gives an estimate based on the live price and the figures you enter. The real price is set by the dealer when you sell, so ask more than one shop and compare.
When is my gold actually in profit?
When the actual resale value is higher than the full cost you paid, including making charges and VAT. Until then, a rising price only shrinks your loss.
Make your invoice the basis of every calculation, and do the sums before you decide to sell rather than after. Accurate numbers protect you from a hasty decision.
