How Scrap Gold & Silver Melt Value Is Really Calculated
Scrap jewelry and coin buyers do not pay the full spot price quoted on financial news tickers. Instead, they pay based on the pure metal content of your item, derived from its karat or purity stamp, then apply a discount off melt value to cover refining costs and profit margin.
Troy Ounces vs Standard Ounces
Precious metals are priced in Troy ounces (31.1035 grams), not the standard Avoirdupois ounce (28.35 grams) used for food or shipping weight. Using the wrong ounce definition alone creates a ~10% valuation error.
Karat Purity Table
10K = 41.7% pure, 14K = 58.3% pure, 18K = 75.0% pure, 24K = 99.9% pure. Sterling silver is stamped "925" and is 92.5% pure silver.
Melt Value Formula
Melt Value = Weight (g) × Purity % × (Spot Price ÷ 31.1035)
Example: 10g of 14K gold at a $2,400/oz spot price = 10 × 0.583 × ($2,400 ÷ 31.1035) ≈ $450.
Why Buyers Pay Less Than 100% of Melt Value
Pawn shops and scrap dealers typically offer 70%–90% of calculated melt value to cover refining loss, assay testing, and profit margin. Mail-in gold buyers often pay on the lower end (50%-70%), while local coin shops that sell direct to refiners tend to offer more competitive rates.
