What Factors Determine the Price of Gold?

The value of gold is not fixed. The same item, with the same weight and purity, can receive a very different valuation just a few months later. Gold prices change constantly on the international market, while exchange rates, purity and the characteristics of the individual item also affect its value on the local market.

Knowing the value of gold is particularly important if you plan to sell or pawn jewellery. For example, when assessing a valuable item, the microfinance organisation Creditservice+ takes into account its purity, weight and the valuation rate in effect at the time. A valuation received several months ago may therefore no longer be current.

How Is the Global Price of Gold Determined?

One of the main benchmark prices on the international gold market is the LBMA Gold Price. It is set twice a day in London and quoted in US dollars per troy ounce.

It is important not to confuse the price of a troy ounce of gold with the price of one gram. A troy ounce is an international unit of measurement used specifically for precious metals, including gold, silver, platinum and palladium. It is equal to approximately 31.1 grams.

To convert the international gold price into a price per gram, the quoted price must therefore be divided by approximately 31.1. This alone, however, is not enough to determine the price of a particular piece of jewellery. The resulting figure reflects the market value of pure gold, not a jewellery alloy.

In the karat system, this refers to 24-karat gold. Under the fineness system more commonly used in Georgia, it corresponds to 999-fineness gold. Jewellery, however, is most often made from 585- or 750-fineness gold, so its value is calculated differently.

For example, 585 fineness indicates that 585 parts out of every 1,000 parts of the alloy are pure gold, or 58.5%. This corresponds to approximately 14 karats. Gold with a fineness of 750 contains 75% pure gold, or approximately 18 karats.

What Determines the Price of 1 Gram of Gold in Georgia?

The price of one gram of gold can differ significantly depending on whether it is assessed at the international market price, the retail price or a pawnshop valuation. Jewellery gold is not valued at the price of one gram of almost pure, 999-fineness gold calculated from the international price.

The purity of the jewellery must first be established. Its final price is then calculated by comparing its weight and fineness, such as 375, 500, 585 or 750, with the market price of pure gold.

In any given country, the price of one gram of gold is often affected by more than the global quotation. The exchange rate also plays a major role. First, the international price is converted into the local currency, which in Georgia is the lari. If the global gold price remains unchanged but the US dollar strengthens against the local currency, the value of gold in lari will soon reflect this change.

What Is Bajaghlo Gold and How Much Is It Worth?

In Georgian, bajaghlo gold is officially synonymous with almost pure gold. Technically, the term should only be used for 999-fineness gold. However, because it is not formally defined in legislation, it is used more broadly in everyday language.

Pure gold is rarely used in jewellery because it is soft and can be easily damaged during everyday wear. Jewellery is most commonly made from alloys with a fineness of 585 or 750, and less frequently from alloys with a fineness of 900 or 958. Other metals in the alloy determine the item’s strength and colour.

Therefore, when the term bajaghlo gold is used to describe a ring or earrings, it generally refers to a high-fineness alloy with the rich, bright yellow colour associated with classic gold. Accordingly, the price of bajaghlo gold is the price of the highest jewellery fineness, 958, rather than that of pure gold.

How Is the Value of One Gram of Gold Assessed at a Pawnshop?

As mentioned above, gold jewellery at a pawnshop is assessed according to its purity, weight and the current valuation rate, rather than the international market price or the complexity of its design.

For example, jewellers charge more for white gold items, on average 10–15% more. However, its actual market value is identical to that of standard gold. From a jewellery-making perspective, white gold alloy costs more because the choice of metals is limited and it is generally more difficult to work with than standard gold. At a pawnshop, however, white gold is normally valued according to its fineness.

According to Creditservice+, as of October 2026, the valuation per gram was GEL 93.45 for 375 fineness, GEL 155.75 for 500 fineness, GEL 194.91 for 583 and 585 fineness, GEL 250.98 for 750 fineness, GEL 299.93 for 900 fineness and GEL 319.51 for 958 fineness.

These rates change because they are calculated in relation to the market price. Before taking an item for valuation, check the current price of a gram of gold so that you have an approximate idea of the amount you can realistically expect.

Why Does the Price of Gold Rise or Fall?

One of the main factors is the exchange rate of the US dollar. Because the international gold price is generally quoted in dollars, a weaker dollar often increases interest among investors whose assets are held primarily in other currencies. Conversely, when the dollar is strong, demand for gold tends to fall.

Interest rates also affect the price. Gold does not generate interest income. When returns on relatively low-risk assets rise, some investors generally direct their money towards those assets. During periods of low real interest rates, interest in gold often increases.

Market demand is another determining factor. This includes demand from the jewellery sector, investment demand and purchases by central banks. For example, in 2024, demand from central banks and other official financial institutions was approximately 1,045 tonnes of gold. If jewellery sales increase alongside investment demand, this creates additional pressure on the market.

Another important factor is inflation. High inflation does not always mean that gold prices will rise. The circumstances that caused the inflation matter. The gold price responds to a complex set of conditions, including the dollar exchange rate, interest rates, economic expectations and geopolitical risks.

How Has the Price of Gold Changed Over the Past 10 Years?

LBMA data provides a clear picture of how gold prices have changed.

According to official figures, the average annual price of gold in 2016 was approximately USD 1,251 per troy ounce. In 2019, it reached approximately USD 1,393, before rising to around USD 1,770 in 2020.

A faster increase has been recorded since 2023. The average price was USD 1,940.54 in 2023, USD 2,386.20 in 2024 and USD 3,431.54 in 2025.

A historical record was set at the end of January 2026, when the price of gold reached USD 5,405. The current price of gold has fallen slightly but remains above the 2025 figure. According to data for the second quarter of 2026, the price of one troy ounce of gold was USD 4,506.29.