What you will learn in this lesson
The price of gold in Iran is not an arbitrary number. It is a chain of four links, and every link can be calculated on its own. In this lesson you will start from the global ounce, convert it to tomans through the dollar rate, apply the purity factor, and see why the number you pay on a jeweller's invoice is higher than the price of the metal itself.
Definitions
Five terms first:
- Troy ounce: the international unit of gold weight, equal to 31.1035 grams. When people say "global gold is at $4,000 an ounce," they mean 31.1035 grams of pure gold is worth four thousand dollars. The ounce always refers to pure gold.
- Purity (عیار, ayar): the ratio of pure gold to the total weight of a piece. 24 karat means 999.9 fineness (effectively pure); 18 karat means 750 parts per thousand, so three quarters of the piece is pure gold and one quarter is alloy metals such as copper and silver. Gold jewellery in Iran is made to the 18 karat standard.
- Mesghal (مثقال): the weight unit customarily used in Iran's gold market, equal to 4.6083 grams.
- Mazaneh (مظنه): the price of one mesghal of 17 karat melted gold (705 fineness), the figure posted on the boards of jewellery shops and exchange houses. In practice the mazaneh is the wholesale price of gold in the domestic market.
- Making charge (اجرت, ojrat): the fee for turning gold metal into a finished piece (a ring, a bracelet, a chain), usually quoted as a percentage of the value of the gold used.
If the difference between melted gold, 18 karat gold and the various coin sizes is still unclear, read the lesson on gold purity and coin types first.
The price chain, link by link
The domestic gold price is built from four simple multiplications and divisions. Each link does one specific job.
Link one: from the ounce to the gram
Divide the global ounce by 31.1035 to get the dollar price of one gram of pure gold. This is the only link with nothing Iranian about it; it is identical everywhere in the world.
Link two: from dollars to tomans
Multiply the result of link one by the free market dollar rate. This is where Iran's economy enters the formula: domestic gold is priced in dollars but traded in tomans. To understand where the dollar rate itself comes from, see the previous lesson on the four channels that move the dollar.
Link three: applying purity
What link two produces is the price of one gram of pure (24 karat) gold. To get to 18 karat, multiply by 0.75, because 18 karat means 750 parts per thousand.
Link four: converting to the mazaneh
The domestic market quotes mesghals rather than grams. The relationship between the two is a fixed number: 4.3318. It combines two conversions, weight and purity: 4.6083 grams multiplied by (705 divided by 750) gives 4.3318. So one mesghal of mazaneh is equivalent to 4.3318 grams of 18 karat gold, and conversely, dividing the mazaneh by 4.3318 gives the price of one gram of 18 karat gold.
A worked example (hypothetical)
Suppose the global ounce is $4,000 and the free market dollar is 180,000 tomans. These figures are hypothetical, chosen only to practise the calculation.
- Gram of pure gold in dollars: 4,000 divided by 31.1035 is about $128.6.
- Gram of pure gold in tomans: 128.6 multiplied by 180,000 is about 23,148,000 tomans.
- Gram of 18 karat gold: 23,148,000 multiplied by 0.75 is about 17,361,000 tomans.
- Mazaneh (per mesghal): 17,361,000 multiplied by 4.3318 is about 75,206,000 tomans.
Now a small test. If the global ounce does not move and only the dollar rises 5 percent to 189,000 tomans, the 18 karat gram rises by exactly 5 percent as well, to about 18,229,000 tomans. That is an important property of the formula: because the dollar and the ounce are both multiplied into the chain, a percentage change in either passes straight through to the domestic gold price.
In Iran's market
So far the formula has been theoretical. Three local points complete it in practice.
One: the board does not sit exactly on the formula
A real snapshot from Sahmino's price data at midday on Monday, 5 Mordad 1405 (27 July 2026), at 12:34 Tehran time: the global ounce at $4,094.98, the free market dollar at 188,700 tomans, the mazaneh at 79,371,000 tomans and the 18 karat gram at 18,323,800 tomans. Test link four: 79,371,000 divided by 4.3318 is about 18,323,000 tomans, which is the board figure. But if you run the chain from the ounce at that same moment you arrive at roughly 24,844,000 tomans for the 24 karat gram, while the board showed 24,431,500 tomans, close to 1.7 percent lower. That means the dollar embedded in the gold price at that hour was around 185,600 tomans, not the 188,700 tomans of cash notes. Traders call this gap the melted gold premium or discount, and it is constantly widening and narrowing. You can follow the current figures on Sahmino's 18 karat gold price page.
Two: three layers are added between the mazaneh and the invoice
The 18 karat gram price is the price of metal, not of a finished piece. Three more items sit on a jeweller's invoice. First the making charge, which differs by item; according to a board member of the Tehran Gold and Jewellery Union, the charge on a bangle is not the same as on cast work, because casting is harder and takes longer. Second the seller's margin, which under trade rules is capped at 7 percent for a retailer and is applied to the combined value of the gold and the making charge. Third value added tax at 10 percent, a rate that rose by one percentage point from 9 to 10 percent at the start of the Iranian year 1403 (March 2024).
Three: the tax base is only the charge and the margin
This point moves the most money for a buyer: value added tax must not be calculated on the gold metal itself, only on the making charge and the margin. The Tehran Gold and Jewellery Union has stated plainly that calculating it on the total invoice value is a violation.
A hypothetical invoice, start to finish
Suppose a gram of 18 karat gold is 20,000,000 tomans (a hypothetical figure for easy arithmetic) and you want to buy a 5 gram bracelet with a 15 percent making charge:
- Gold value: 5 multiplied by 20,000,000 is 100,000,000 tomans.
- Making charge at 15 percent: 15,000,000 tomans. Running total 115,000,000 tomans.
- Seller margin of 7 percent on 115,000,000: 8,050,000 tomans.
- Tax at 10 percent on the charge and margin combined (23,050,000 tomans): 2,305,000 tomans.
- Final price: 125,355,000 tomans.
In other words, for every 100 tomans of gold you have paid about 125 tomans. That 25 percent premium is the cost of gold being ornamental, and it does not come back when you sell, because the jeweller pays only for the metal when buying.
Common mistakes
- "Gold got more expensive, so the ounce must have risen." Not necessarily. The chain has two multipliers. On some days the ounce is flat and only the dollar moves; on others the two move in opposite directions and cancel each other out.
- Comparing the mazaneh with a gram price. These are different units. The mazaneh is the price of one 17 karat mesghal and must be divided by 4.3318 before any comparison.
- Accepting tax on the full invoice. In the hypothetical example above, if 10 percent tax were wrongly charged on the whole 123,050,000 tomans, the tax would jump from 2,305,000 to 12,305,000 tomans, an extra 10 million tomans on a small purchase.
- Treating the making charge and the margin as one item. The charge is the maker's fee and the margin is the seller's share: two separate items with two different calculation bases, and both should be itemised on the invoice.
- Expecting the formula to match the board exactly. The formula produces a reference, not a guarantee. Domestic supply and demand always open a small gap, and for coins that gap has a specific name, discussed in our piece on melted gold versus the Emami coin.
Summary
Iran's gold price is the product of one global number and one domestic number, cleaned up by two fixed conversions: the ounce divided by 31.1035, multiplied by the dollar, multiplied by 0.75 for 18 karat, and multiplied by 4.3318 if you want the mazaneh. That gets you the price of metal. What you pay on an invoice carries three further layers: the making charge, a margin of up to 7 percent, and a 10 percent tax that applies only to the charge and the margin. Every time you hear a gold price, first ask which link of the chain you are looking at.
In the previous lesson, What Moves the Dollar?, we examined link two of this same chain on its own. The full lesson list is available in the Sahmino Academy section.
Analysis
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