Melt value and offer are two different numbers
Melt value is arithmetic. Take the mass of the item, multiply by its purity to get the mass of pure metal, and multiply that by the market price per gram. It is not an opinion and every buyer computes it the same way, because it is what the metal is worth on the exchange the moment it becomes refined bullion.
The offer is a business decision. Between your ring and a bar of good delivery gold sit assay, refining loss, freight, insurance, the buyer's hedging cost and the buyer's margin. Every one of those is real, which is why nobody pays 100% of melt. Refiners buying in kilogram lots from trade customers typically pay in the high 90s. Trade counters and wholesale buyers pay less. Walk-in cash-for-gold shops pay least, because they carry retail overhead, buy in tiny lots and take on the risk that the item is misrepresented.
The reason to compute melt yourself is not to argue that a buyer should pay it. It is to convert a dollar offer into a payout percentage, which is the only number that lets you compare two buyers who weigh in different units and quote on different days.
The formula and the three unit traps inside it
The calculation is one line: melt = weight × purity × spot ÷ 31.1034768. Everything that goes wrong goes wrong in the units.
Troy ounces are not ounces. Precious metals trade in troy ounces of 31.1034768 g. The avoirdupois ounce on a kitchen scale is 28.349523 g — about 10% lighter. Treating one as the other overstates the metal by 9.7%.
Pennyweight is the trade's working unit in North America. One pennyweight (dwt) is 1/20 of a troy ounce, or 1.55517384 g. Many buyers weigh in pennyweight and quote a price per pennyweight, which makes the number look larger than a per-gram quote for the same metal. Convert both to the same unit before comparing: a per-dwt price is always 1.555 times the per-gram price for the same payout.
Karat is a fraction, not a grade. A karat is one twenty-fourth of the alloy by mass, so 14K is 14/24 = 58.33% gold and 18K is 75%. That means 18K contains 28.6% more gold per gram than 14K, not 4 units more of anything. Outside the United States the same information is stamped as fineness in parts per thousand — 585 for 14K, 750 for 18K, 916 for 22K — and the metric mark is the more precise of the two, because US law permits a small tolerance below the marked karat.
Silver and platinum use fineness directly. Sterling is 925, coin silver 900, Britannia 958, and platinum jewellery is usually 950 or 900. Switch the purity mode to fineness and type the hallmark number.
Worked example: a 14K chain at an assumed $2,400 spot
You have a 14K gold chain that weighs 18.4 g with the clasp, and a shop is offering $700. Assume the market is at $2,400 per troy ounce.
- Spot per gram. 2,400 ÷ 31.1034768 = $77.1616 per gram of pure gold.
- Purity. 14 ÷ 24 = 0.583333.
- Pure gold content. 18.4 × 0.583333 = 10.7333 g of fine gold.
- Melt value. 10.7333 × 77.1616 = $828.20.
- Convert the offer to a payout. 700 ÷ 828.20 = 84.5% of melt.
- Per pennyweight. 828.20 ÷ 18.4 = $45.01 per gram of chain, and × 1.55517 = $69.99 per dwt — which is how the shop would quote it.
84.5% is a strong walk-in offer. If a second shop quotes $58 per pennyweight, that is 18.4 ÷ 1.55517 = 11.83 dwt × 58 = $686, or 82.8% of melt — slightly worse despite sounding like a different kind of quote entirely.
What payout percentage should you expect?
Convert every quote to a percentage of melt and compare only those. As a working guide, large refiners buying trade lots settle in the mid-to-high 90s, wholesale trade counters buying from jewellers commonly land in the 80s, and walk-in retail buyers commonly land in the 60s to low 80s. Those bands are practitioner rules of thumb, not published rates, and they move with metal prices and with lot size; ask each buyer directly what percentage of melt they are paying and hold them to the answer.
Silver behaves differently from gold. The absolute value per gram is roughly one to two percent of gold's, so the fixed handling cost of a small silver lot is a much larger share of its value. Payout percentages on small silver lots are correspondingly lower, and many buyers set a minimum weight before they will quote at all.
Do not sell saleable jewellery by weight. Melt value ignores design, brand, condition and stones entirely. A signed piece, a period item or anything with a decent centre stone is usually worth several times its metal on the secondhand market. Melt is the floor price, and it is the right price only for broken chains, single earrings, dental gold and worn-out mountings.
If you are on the making side rather than the selling side, the gold karat alloy calculator works the same arithmetic in reverse, telling you how much fine gold and alloy to combine to hit a target karat.
Purity, fineness and gold content by karat
| Mark | Fineness | Gold content | Fine gold per gram | Melt per gram at $2,400 |
|---|---|---|---|---|
| 24K | 999 | 99.9% | 0.999 g | $77.08 |
| 22K | 916 | 91.67% | 0.9167 g | $70.73 |
| 21K | 875 | 87.5% | 0.875 g | $67.52 |
| 18K | 750 | 75.0% | 0.750 g | $57.87 |
| 14K | 585 | 58.33% | 0.5833 g | $45.01 |
| 10K | 417 | 41.67% | 0.4167 g | $32.15 |
| 9K | 375 | 37.5% | 0.375 g | $28.94 |
| Sterling silver | 925 | 92.5% Ag | 0.925 g | Use the silver spot price |
| Platinum, jewellery | 950 | 95.0% Pt | 0.950 g | Use the platinum spot price |
Fineness marks are rounded conventions: 14K is exactly 583.3 parts per thousand but is stamped 585 in most metric-marking countries, which is a deliberate over-mark so the piece cannot assay under.
Gold-filled and plated items are not scrap gold
A piece marked GF, RGP, 1/20 12K GF, HGE or vermeil carries a surface layer, not solid metal. Gold-filled stock is legally at least 1/20 of the article's weight in gold, and plating is far thinner than that — often a fraction of a percent. Entering the full item weight for a plated piece will overstate its value by one or two orders of magnitude. Refiners will usually take gold-filled by the pound at a heavily discounted rate and will not take plate at all. Check for a karat mark with no letters after it before treating anything as solid.
Mistakes that cost sellers money
- Weighing on a kitchen scale in ounces. Avoirdupois ounces are 9.7% lighter than troy ounces. Weigh in grams and let the calculator convert.
- Comparing a per-gram quote with a per-pennyweight quote. They differ by a factor of 1.555 before any payout difference. Convert both to a percentage of melt.
- Weighing stones and findings as metal. Buyers deduct them, and a large stone can be a third of the item's mass. Expect the buyer's weight to be lower than yours.
- Mixing karats in one pile. If 10K and 18K are weighed together, the whole lot is usually paid at the lowest karat present. Sort by hallmark first.
- Using a stale spot price. Precious metal prices move every trading day and sometimes by several percent in one session. Look up spot the morning you sell.
- Selling a saleable piece for melt. Designer, antique and stone-set jewellery is generally worth more intact. Melt is the floor, not the market.
Verifying purity, and where the trade's numbers come from
The purity you type in should come from a hallmark, and hallmarks are regulated. In the United States, the National Gold and Silver Stamping Act and the Federal Trade Commission's Guides for the Jewelry, Precious Metals and Pewter Industries (16 CFR Part 23) govern what a karat mark may claim and the tolerance permitted below it. In the United Kingdom, an assay office mark is compulsory above small weight thresholds and carries the fineness, the office and a date letter. Unmarked items are common in older and imported jewellery and need testing.
Three tests are in routine use. Acid testing scratches the item on a touchstone and applies graded nitric-acid solutions; it is cheap, destructive in a tiny way, and reliable enough for sorting. Electronic conductivity testers are fast but are fooled by heavy plating over a conductive core. XRF analysis fires X-rays at the surface and reads the emitted spectrum; it is non-destructive and accurate, and is what any serious buyer uses — but it still reads the surface, so a thick plate can hide a base core. For high-value lots, refiners melt a sample and assay the melted button, which is the only method that sees the whole piece.
Once you know what you have, the decision is a straight comparison: melt-based offer today, versus what the piece would fetch intact on the secondhand market, minus selling fees and the time it takes. If you sell online, price the fees in with the eBay fee calculator or the Etsy fee calculator before you conclude that the intact route wins, and if you are shipping to a refiner, the insured freight cost is part of your payout too.
Key terms
- Spot price
- The price for immediate delivery of one troy ounce of the refined pure metal, quoted continuously on the international market. Every scrap valuation starts here.
- Melt value
- The spot value of the pure metal contained in an item, ignoring workmanship, stones and brand.
- Pennyweight (dwt)
- One twentieth of a troy ounce, 1.55517384 g. The traditional working unit of the North American jewellery trade.
- Fineness
- Purity expressed in parts per thousand. 925 sterling silver is 925 parts silver, 75 parts copper.
- Gold-filled
- A thick layer of karat gold mechanically bonded to a base metal core, legally at least 1/20 of the article's weight in the United States. Not solid gold and not valued as scrap gold.