How Gold Melt Value Works (and Why Dealers Pay Less)

The short answer: melt value is weight × purity × spot ÷ 31.1035. A 10-gram 14k chain at a $4,000 spot price carries about $750 of pure gold — and a fair dealer offer lands at 70–90% of that number.

Everything a scrap buyer will ever pay you flows from one equation, and none of it depends on how the piece looks, who made it, or what you paid. Jewelry retail bundles design, brand and margin on top of the metal; scrap strips all of that away. Knowing your melt number before you walk in is the entire game.

The three inputs

Weight. Gold trades in troy ounces — 31.1035 grams, about 10% heavier than the kitchen (avoirdupois) ounce. Jewelers often quote in pennyweight (dwt): 20 dwt to a troy ounce, 1.5552 g each. Weigh in grams on any kitchen scale and let the scrap gold calculator do the conversions — mixing up the two ounces is the most common DIY valuation error.

Purity. The karat stamp states gold content in 24ths:

Stamp	European mark	Gold content	Pure gold in 10 g
24k	999	99.9%	9.99 g
22k	916	91.7%	9.17 g
18k	750	75.0%	7.50 g
14k	585	58.3%	5.83 g
10k	417	41.7%	4.17 g
9k	375	37.5%	3.75 g

Look inside ring bands, on clasp tags and pendant bails. “GP”, “GF”, “HGE” or “RGP” mean plated or filled — micrograms of gold, no scrap value. No stamp at all? It may still be solid (old or worn pieces); a buyer will acid-test or XRF-scan it, but expect a conservative quote.

Spot. The live per-troy-ounce market price — the number on the gold price per gram page. It moves constantly, so a quote from last month is stale.

Why the offer is below melt — and by how much

The dealer refines your scrap (a real cost), verifies your purity (assay risk), holds the metal while prices move (market risk) and needs a margin. All legitimate. The question is the size of the haircut:

Buyer	Typical payout
Online refiners	85–95% of melt
Local coin/bullion shops	75–90%
Jewelers buying scrap	60–80%
Mall kiosks, “we buy gold” storefronts	40–65%
TV / mail-in buyers	often under 50%

The spread between the best and worst buyer on the same item is routinely 2×. Getting a second quote is the highest-paid twenty minutes in this entire process. Treat any offer under 70% of your calculated melt as a signal to walk — politely, with your gold.

The tricks worth knowing

Buyers who lowball rarely do it by lying about the spot price — it’s too easy to check. Instead: weighing stones in with the metal, quoting pennyweight prices that sound like gram prices (a dwt is ~1.56 g, so “$40 per dwt” is only ~$26/g), “testing fees” deducted after a verbal quote, and bundling your 18k in with the 10k at a blended rate. Every one of these dissolves if you arrive knowing your per-item melt number.

Selling silver instead? Same math, different table — the silver melt value calculator covers sterling and US 90% coins, and coins often sell at melt rather than below it.