How to Calculate Scrap Gold Value

If you are reading this, you probably have a drawer full of broken chains, a lone earring, or your grandmother's ring that never fit. Before you walk into a pawn shop or mail it off to a refiner, you need to know how to calculate scrap gold value yourself. The good news: it is a three-step math problem, not a guessing game. The bad news: most sellers skip the math, and they pay for it. The melt value formula is the same one the calculators use, and once you know it, you can walk into any negotiation with a number in your head. You will not be relying on the buyer's scale or their mood. You will be relying on the metal itself.

Your kitchen scale is not good enough. A postal scale that rounds to the nearest gram is not good enough. For scrap gold, you need a digital scale that reads in grams with at least one decimal place, ideally two. Why the precision? Because gold is dense and expensive. A single gram of 14K gold is worth over $40 at today's prices, so a scale that reads 0.1 grams high on a 5-gram ring overstates the value by 2%, which is nearly a dollar per gram in melt value. That is the difference between a fair offer and a bad one.

Here is the failure case: you are at home, it is 1am, and the only scale you have is the one in the bathroom. Do not use it. Bathroom scales are not calibrated for grams, they drift, and they cannot handle the weight of a small piece of jewelry accurately. Instead, buy a small jewelry scale online for under $20. It will pay for itself the first time you sell. When you weigh, place the item on the scale alone, never with a box or a cloth. Remove any stones, clasps, or findings that are not solid gold, because they will throw off the weight. If you cannot remove a stone without damaging the piece, weigh the piece, then weigh a similar piece without stones, and subtract. It is not perfect, but it is better than guessing.

You have the weight in grams, but the spot price is quoted per troy ounce. This is where the scrap gold formula trips up more people than any other step. A troy ounce is not the same as the ounce you use for flour. A troy ounce weighs 31.1035 grams, while a standard (avoirdupois) ounce weighs 28.3495 grams. If you use the wrong ounce, you will overstate the gold value by about 9.7%. That is not a small error; it is the difference between a fair deal and a bad one.

To convert your weight in grams to troy ounces, divide by 31.1035. For example, a 15.5-gram chain is 15.5 ÷ 31.1035 = 0.498 troy ounces. If you are working in pennyweight (dwt), which some dealers use, divide by 20 to get troy ounces, because there are 20 pennyweight in a troy ounce. The formula is the same either way; you just need to be in the right unit before you multiply.

Gold is rarely pure. A 24K piece is 99.9% gold, but most scrap is 10K, 14K, or 18K. The karat stamp tells you how much gold is in the alloy, and you convert it to a decimal by dividing by 24. A 14K piece is 14 ÷ 24 = 0.583, meaning 58.3% of its weight is gold. A 10K piece is 10 ÷ 24 = 0.4167, or 41.67%. An 18K piece is 0.75, or 75%. This is the purity factor in the melt value formula. Multiply your weight in troy ounces by this decimal, and you get the pure gold content.

For example, take a 10-gram (0.3215 troy ounce) 14K ring.That is the actual gold, not the weight of the whole ring. The other 41.7% of the ring's weight is copper, silver, and other alloy metals that have no melt value in this context. This is why a heavy 10K ring can be worth less than a lighter 18K piece. The purity, not the total weight, drives the value.

Now you have the pure gold weight in troy ounces. The final step is to multiply that by the current spot price of gold. The spot price is the market price for one troy ounce of 24K gold, set by the London Bullion Market Association (LBMA) twice a day, five days a week. It is not a static number. It moves with supply and demand, economic news, and the value of the dollar. You can look it up on any financial news site or a dedicated gold price page. The spot price is the number the formula uses, not the price a dealer pays you.

For example, if the spot price is $2,000 per troy ounce, and your pure gold weight is 0.1875 troy ounces, the melt value is 0.1875 × $2,000 = $375. That is the melt value. It is the raw worth of the gold if it were refined into a pure bar. You will not receive $375 from most buyers. The dealer has to refine the gold, pay their staff, and make a profit. So they pay a percentage of the melt value, usually between 60% and 80%, depending on the karat, the weight, and the volume you are selling.

Let us run the scrap gold formula twice to make it stick. First, a 14K gold chain that weighs 12.5 grams on your scale. Convert to troy ounces: 12.5 ÷ 31.1035 = 0.4019 troy ounces. Apply purity: 14K is 0.583, so 0.4019 × 0.583 = 0.2343 troy ounces of pure gold. If the spot price is $1,900 per troy ounce, the melt value is 0.2343 × $1,900 = $445.17. A dealer paying 75% of melt would offer you about $333.88. That is your number.

Second, a 10K ring that weighs 6.8 grams. Convert: 6.8 ÷ 31.1035 = 0.2186 troy ounces. Purity: 10K is 0.4167, so 0.2186 × 0.4167 = 0.0911 troy ounces of pure gold. At a spot price of $1,900, the melt value is 0.0911 × $1,900 = $173.09. A dealer paying 70% of melt would offer you about $121.16. Notice the 10K ring is lighter, but the 14K chain is worth more per gram because it has more gold. That is the point of the formula.

The melt value formula is exact, but the scrap gold market is not. The formula gives you the pure gold content's worth, not what you will actually receive. The gap is the dealer's spread, which covers refining costs, market risk, and profit. Refining costs are not a flat percentage; they scale with volume. A single 1-gram piece is not worth the dealer's time, so they will pay a lower percentage to make it worthwhile. A bag of 100 grams is a different story. This is why the scrap gold value ranges by weight and karat, and why the same ring can get a wildly different offer from a pawn shop versus a refiner.

There is also the tax angle. If you sell gold for more than your cost basis, the profit is taxable as a capital gain. For most people selling scrap, the cost basis is what they paid for the item, which is often unknowable for inherited pieces. The IRS treats gold as a collectible, with a top capital gains rate of 28% for long-term holdings. You do not pay tax at the moment of sale; you pay it when you file your return. If you sell more than $600 in a year, the buyer may issue a 1099-B, but that is not a guarantee. You are responsible for reporting the sale, not the dealer.

The table below shows melt values and typical offers for 10 grams of each karat, based on a spot price of $1,900 per troy ounce. These are estimates; your offer will depend on the dealer and market conditions.

Karat	Purity (Decimal)	Pure Gold per 10g (troy oz)	Melt Value at $1,900/ozt	Typical Offer (60-80% of Melt)
24K	0.999	0.3212	$610.28	$366.17, $488.22
18K	0.750	0.2411	$458.09	$274.85, $366.47
14K	0.583	0.1875	$356.25	$213.75, $285.00
10K	0.4167	0.1340	$254.60	$152.76, $203.68

The scrap gold formula is the same as the gold value by weight method, but the two phrases are not interchangeable. The scrap gold formula adds the purity step, which the weight-based method often skips. If you simply multiply the total weight of a 14K chain by the spot price, you will overvalue it by 71.4% (because 14K is only 58.3% gold). The gold value by weight method is only accurate for 24K bullion. For scrap, you must always apply the purity factor. That is the difference between a formula that works and a guess that loses money.

Here is how the two relate: the gold value by weight is a sub-step of the scrap gold formula. You first find the pure gold weight by multiplying the total weight by the purity. Then you apply the spot price. The formula does not change; it just has an extra step. If you are selling a 24K coin, the purity is 0.999, so the two methods converge. If you are selling a 10K ring, they diverge by a factor of 2.4. The formula is the only one that works for scrap.

How do I calculate scrap gold value if I only know the weight in grams?

Divide the weight in grams by 31.1035 to get troy ounces, then multiply by the purity decimal (karat divided by 24), then multiply by the spot price per troy ounce. That is the melt value.

Why do dealers not pay the melt value?

Dealers pay a percentage of melt value because they must refine the gold, cover their operating costs, and make a profit. The percentage varies by karat, weight, and volume, but 60% to 80% is common for small lots.

What is the difference between a troy ounce and a regular ounce for gold?

A troy ounce is 31.1035 grams, while a standard ounce is 28.3495 grams. Using a regular ounce overstates the gold value by about 9.7%, so always convert to troy ounces for the formula.

Can I calculate scrap gold value with stones in the piece?

Weigh the piece with the stones, then weigh a similar piece without stones, and subtract. Or remove the stones first. The formula only applies to the gold weight, so you must exclude non-gold parts.

How do I know the spot price is fair?

The spot price is set by the LBMA and is published on financial news sites. Use the same day's spot price for your calculation. A dealer's offer below 60% of melt is low; above 80% is good, but rare for small amounts.

Here is the truth: the melt value formula is exact, but the scrap gold market is not kind to sellers. You are almost never going to get the melt value, and you should not expect to. The offer you receive is a business proposition, not a reflection of the metal's worth. The formula is your shield against being cheated, not a tool for getting rich. If you have a small amount of scrap, the difference between 60% and 80% of melt might be $20. That is not nothing, but it is not worth driving across town for. If you have a large amount, the difference is significant, and you should shop around. The formula tells you the floor; the market tells you the ceiling. Know both, and you will not be taken advantage of.

meta description: Learn how to calculate scrap gold value with a simple three-step formula: weight in troy ounces, purity, and spot price. Two worked examples and payout ranges included.