Buying Gold in Saudi Arabia: Karats, Invoice and Hallmark

When buying gold in Saudi Arabia, first ask about the karat, weight and gram price, then about the making charge separately, then whether the price includes value-added tax, and ask for a detailed invoice and check the hallmark. Shops usually post the gram price for each karat in riyals, with the workmanship charge added on top, and the actual price may differ from one shop to another, so comparison is your best tool.

Common karats

The karat expresses the proportion of pure gold in the piece, and it is what sets the gram price. These are the karats you will usually come across in the markets:

What is on offer differs from shop to shop, and not every karat is available everywhere. And when comparing two offers in different karats, do not stop at the total price, but look at the amount of pure gold in each piece: a heavier piece in a lower karat may contain gold similar to a lighter piece in a higher karat.

How do shops show prices?

It is common for a shop to post the gram price for each karat in Saudi riyals, and sometimes the ounce or kilogram price for bars. The price of jewelry is usually worked out like this: weight × gram price + making charge (+ tax). You may find pieces offered at a lump-sum price, and sometimes at a gram price that includes the making charge, so always ask what the figure includes.

Prices move during the day, and the actual price in the shop may differ slightly from any published price. Before you go, you can follow the gold price today in Saudi Arabia to get a picture of the rough range, and use the gold calculator to estimate the value of the gold alone in a piece before you add the workmanship.

The making charge

The making charge is the cost of workmanship and design plus the shop's margin, and it is usually shown as an amount per gram, a percentage or a price per piece. It varies with the method of manufacture, the design, the detail of the piece and its weight, and on light delicate pieces the making charge per gram is usually higher. Ask for it separately and per gram, and compare two or three shops for a similar piece. Imported or branded pieces may carry a higher making charge than locally made ones, and you are entitled to ask why and to decide whether the design is worth that extra to you. You will find the full explanation in gold making charges: how they're calculated and negotiated.

Value-added tax and fees

Value-added tax applies in the Kingdom to many goods and services, but we do not state a rate or a detailed rule here because rules can change, and the treatment of jewelry may differ from that of investment bars or used gold. The safest course is to ask the seller plainly: does the price include tax? On which part was it applied? Ask for the amount to appear on its own line in the invoice, and check with the official tax authority if you want to confirm the current position.

The invoice

The invoice is your first proof for exchange, repair or resale. Ask for it to include the shop's name and details and the date of purchase, the description of the piece with its weight, karat, gram price, making charge, tax and total, the item code if there is one, and the exchange policy. If the invoice is electronic or sent to your phone, keep a copy in two different places, since it is your reference for any later review. For the details line by line, read how to read a gold invoice.

The hallmark and checking the piece

• Look for the hallmark stamped on the piece and its karat, and ask the seller what each mark on it means, since one mark may show the karat and another the maker or the shop.
• Buy from a known licensed shop, and if the sum is large, ask whether the piece can be tested by an accredited body.
• Weigh the piece in front of you and compare the figure with the invoice.
• Watch for stone-set pieces: ask for the stones and their weight to be described, since they are not counted as gold on resale.
• Do not rely on the hallmark without an invoice, or on the invoice without looking at the piece.

And if you find an offer far cheaper than the other shops, treat it as a reason for caution, not for joy, and check the karat and weight before anything else.

Bars and coins: another way to save

If your aim is saving rather than adornment, bars and coins (usually 24K) may be closer to the purpose, because the extra over the gold value is usually smaller than the making charge on jewelry. Ask about the premium and about both the selling and buying prices, ask for an invoice stating the weight and purity, and keep the packaging and certificate if there are any. The tax treatment may differ from that of jewelry, so ask and do not assume.

After buying: storage and care

Store each piece separately in a pouch or box so they do not scratch one another, avoid exposing them to chemicals, perfumes and cleaning products, and take them off for sport or heavy work. Record the weights, item codes and photos of the pieces in one place, and keep the invoices somewhere safe.

A worked example

For illustration only, suppose you want a bracelet weighing 15 grams in 21K, the gram price in this example is 400 riyals, the making charge is 20 riyals per gram, and a hypothetical 10% tax applies to the making charge alone. These are teaching figures, not today's price and not an official rate.

If another shop offered a making charge of 15 riyals per gram, it would be 225, the hypothetical tax 22.5 and the total 6,247.5, which is about 82.5 riyals less. A small difference per gram multiplies with the weight, and that is reason enough to ask and compare.

Practical tips

1. Set your budget in grams before entering the shop, allowing for the making charge and tax.
2. Compare two or three shops for a similar piece in weight and karat.
3. Ask for the buying price (the resale price) of the same piece, since it shows the gap to expect later.
4. Ask for a detailed invoice whatever the method of payment, and keep a photo of it.
5. Know the exchange and repair policy before paying, preferably in writing.
6. Do not rush during seasons and occasions, since crowds and dazzling offers may push you beyond what you planned.
7. Keep the piece safe after buying, and record its weights and item codes.

A checklist before paying

The prices and figures in this guide are indicative and for illustration only, and are not a recommendation to buy or sell. Check current prices and rules with the seller and the official authorities before any transaction.