A gold buyer’s offer comes from four numbers multiplied together: the weight of the gold, its purity, the current spot price of gold, and the percentage of that value the buyer pays. Weight is measured on a certified scale, usually in grams or pennyweights. Purity comes from the karat, confirmed by testing. Spot is the live market price for one troy ounce of pure gold. The percentage is the buyer’s share, which covers refining, assay risk, overhead and profit.
Written out, the formula is: weight in grams × purity × (spot price ÷ 31.1035) × payout percentage = offer. Everything else, from per pennyweight price sheets to volume tiers, is a variation on that line. Below is each term explained, a full worked example with round hypothetical numbers, and the places where offers quietly differ even when two buyers say they use the same formula.
Term one: weight, and the three units that cause confusion
Gold jewelry is weighed in grams or pennyweights. Bullion is priced in troy ounces. None of these is the ounce on a kitchen scale, and mixing them up is the most common arithmetic mistake sellers make.
| Unit | Equals | Where you see it |
|---|---|---|
| Gram (g) | The base metric unit | Jewelry scales, most buyers’ calculators |
| Pennyweight (dwt) | 1.555 grams; 20 dwt make one troy ounce | American jewelry trade and scrap price sheets |
| Troy ounce (ozt) | 31.1035 grams | The spot price of gold, bullion coins and bars |
| Avoirdupois ounce (oz) | 28.35 grams | Kitchen and postal scales. Not used for gold. |
A troy ounce is about 10 percent heavier than a kitchen ounce. A bracelet that reads exactly one ounce on a kitchen scale weighs only about 0.91 troy ounces, so multiplying that kitchen reading by the spot price overstates the gold by roughly a tenth before purity even enters the picture. Weigh in grams if you weigh at all.
At the counter, the scale matters. Buyers of New York weighs on DCA certified scales, a reference to the city consumer protection agency (now the Department of Consumer and Worker Protection) that inspects commercial weighing devices, and does it in front of the seller. A seller should always be able to see the display. A cheap or uncalibrated scale that reads a few tenths of a gram light costs you on every item.
What gets weighed and what does not
The weight that counts is the gold, not the whole object. Stones, pearls, steel clasp springs, base metal pin stems, enamel and the cement inside some hollow bangles are not gold. A buyer either removes those parts, weighs them separately and subtracts them, or estimates their weight. Small melee diamonds weigh almost nothing; a large colored stone in a class ring can be a noticeable share of the total. Ask how the deduction was worked out.
Term two: purity, from the karat
Purity is the share of the weight that is pure gold. Karat is measured out of 24, so the purity figure is the karat divided by 24, rounded to the conventional fineness used in stamps.
- 10K: 41.7 percent
- 14K: 58.5 percent
- 18K: 75.0 percent
- 22K: 91.7 percent
- 24K: 99.9 percent
The purity used should come from a test, not just the stamp, because stamps can be wrong and many pieces are not stamped at all. Buyers of New York tests with acid or XRF analysis before making an offer. If you want to understand the stamps first, our post on telling what karat your gold is walks through them.
Multiply weight by purity and you get the fine gold content, the number of grams of pure gold in the piece. A 20 gram 14K chain holds 20 × 0.585 = 11.7 grams of pure gold. That figure is the heart of the offer.
Term three: the spot price
The spot price is the market price for immediate delivery of one troy ounce of pure gold. In the United States it tracks the most active gold futures contract on the COMEX exchange, which trades nearly around the clock from Sunday evening to Friday afternoon, New York time. In London, the LBMA Gold Price is set twice each business day by an electronic auction, at 10:30 and 15:00 London time, and is used as a benchmark for many contracts.
Spot changes every few seconds while the market is open. That is why a responsible buyer prices off the live number at the moment of the offer rather than a sheet printed earlier in the week. Buyers of New York’s pages state that offers use the live spot price at the time of the visit, and that the spot figure is shown before you accept anything.
To use spot with grams, divide it by 31.1035. If spot were $3,000 per troy ounce, one gram of pure gold would be worth about $96.45. To use it with pennyweights, divide by 20: $3,000 ÷ 20 = $150 per pennyweight of pure gold.
You can look up spot yourself on any major financial news site, a bullion dealer’s homepage, or the live ticker on the Buyers of New York gold page. Check it on the day you visit. A number from a week ago is useless.
Term four: the payout percentage
Multiplying fine gold content by spot gives the melt value: what the pure gold in your piece would be worth if it were already refined into a bar and sold at the market price. No buyer pays full melt on jewelry, and you should be suspicious of anyone who says they do, because turning a bag of chains into a bar costs money.
The gap between melt value and the offer covers several real costs:
- Refining. Scrap jewelry has to be melted, assayed and refined to remove copper, silver, zinc and nickel. Refiners charge for this and also keep a small share for metal lost in processing.
- Assay risk. A counter test is accurate, but a refinery assay is final. Underkarated pieces and solder repairs mean a lot can come out slightly lower than tested.
- Market risk. The buyer pays you at today’s price but may not sell to a refiner until later. If gold drops in between, the buyer absorbs it.
- Overhead and margin. Rent, insurance, security, staff and profit.
Buyers state the percentage in different ways. Some quote a percentage of melt. Some publish a price per pennyweight for each karat. Some quote spot minus a dollar amount, which is common for bullion. Buyers of New York publishes payout rates per pennyweight for each karat and notes that higher volumes receive better rates, and its bullion bars are quoted as spot minus a small fixed amount per ounce. The structure varies; the underlying arithmetic does not.
A worked example, start to finish
Here is a typical small lot, priced with round numbers. These figures are hypothetical and are not a quote from Buyers of New York or anyone else. Assume spot is $3,000 per troy ounce and that the buyer pays 85 percent of melt.
| Item | Gold weight | Purity | Pure gold | Melt value at $96.45/g |
|---|---|---|---|---|
| 14K rope chain | 20.0 g | 58.5% | 11.70 g | $1,128.49 |
| 10K class ring (stone removed) | 12.0 g | 41.7% | 5.00 g | $482.65 |
| 18K stud earrings, pair | 4.0 g | 75.0% | 3.00 g | $289.36 |
| Total | 36.0 g | 19.70 g | $1,900.49 |
At 85 percent of melt, the offer would be about $1,615. At 80 percent it would be about $1,520; at 90 percent, about $1,710. That spread of nearly $200 on a modest lot is why the percentage matters as much as the spot price.
The same lot in pennyweights
Many American price sheets work per pennyweight per karat. At a $3,000 spot, the melt value per pennyweight works out like this: 10K about $62.55, 14K about $87.75, 18K about $112.50, 22K about $137.50, 24K about $149.85. The 20 gram chain is 12.86 pennyweights, so its melt value is 12.86 × $87.75, about $1,128, the same answer by a different route. If a buyer quotes you per pennyweight, convert it to a percentage of melt by dividing their figure by the melt figure for that karat. A 14K quote of $75 per pennyweight against a melt of $87.75 is about 85 percent.
Why two buyers quoting “the same formula” give different numbers
Every buyer says they pay on weight, purity and spot. Offers still differ, and the reasons are almost always in the details:
- Different spot. Using yesterday’s close, or the “bid” side of the market rather than the midpoint, shaves a little off.
- Different weight. Rounding down to the nearest whole pennyweight, generous stone deductions, or a scale that reads light.
- Different purity. Calling a 14K piece 10K, or applying a blanket underkarat discount without testing.
- Different percentage. The real difference, and the one sellers rarely ask about.
- Fees. Testing fees, refining fees, or “processing” charges taken out after the headline number.
The fix is to ask for each number separately: the weight on the scale, the karat found by testing, the spot price used, and the final offer. With those four you can work out the percentage yourself. Buyers of New York says it shows every number before making an offer and gives a written offer with no obligation to accept, which lets you compare like with like. Our post on comparing two gold offers goes through that comparison step by step.
When the formula is only the floor
Melt arithmetic sets the minimum value of anything made of gold. Some items are worth more than their metal, and pricing them on weight alone leaves money behind.
- Signed designer pieces from houses such as Cartier, Tiffany or Van Cleef and Arpels can sell well above melt because buyers want the name.
- Pre-1933 US gold coins and graded coins often carry collector premiums above their gold content.
- Luxury watches in gold cases are valued as watches, not as cases.
- Diamonds and gemstones are valued separately from the gold that holds them.
Buyers of New York’s gold page notes that designer pieces are assessed for a premium above melt and pre-1933 coins for numismatic value, and that diamonds are evaluated separately from the gold. Make sure anything in these categories is set aside before a lot is weighed as scrap.
Checking an offer yourself in two minutes
- Note the live spot price on your phone at the counter.
- Divide by 31.1035 to get the price per gram of pure gold.
- For each karat group, multiply the tested weight by the purity and by that per gram figure. Add the groups up. That is melt value.
- Divide the offer by melt value. The result is the percentage you are being paid.
If the buyer will not give you the weight or the karat they found, you cannot do step three, and that tells you something about the offer.
What to bring, and how the numbers are shown here
Bring your gold, any paperwork for signed pieces or coins, and a valid government issued photo ID. You do not need to sort or clean anything. At Buyers of New York every piece is tested and weighed in front of you, the live spot price and the karat are shown, and you receive a written offer you are free to decline. Most visits take 20 to 30 minutes.
We are at 30 W. 47th Street, Suite 8006, New York, NY 10036, open Monday through Friday from 10am to 6pm, and walk-ins are welcome. For large lots or estates, call (212) 642-4345 so time can be set aside. You can see the karat rates and use the calculator on our page about how we buy gold before you come in, and our process page explains each step of the visit.
More questions sellers ask
How many grams are in a pennyweight?
One pennyweight is about 1.555 grams, and 20 pennyweights make one troy ounce of 31.1035 grams. American scrap price sheets often quote per pennyweight for each karat.
Why does no buyer pay 100 percent of melt value on jewelry?
Scrap jewelry has to be refined into pure gold before it can be sold at the market price. The gap covers refining charges, metal lost in processing, assay and market risk, and the buyer's overhead.
Does the spot price change while I am at the counter?
Yes. Gold trades almost continuously on weekdays and the price updates every few seconds. An offer is calculated at the live price at that moment.
How do I turn a per pennyweight quote into a percentage?
Divide spot by 20 to get the value of a pennyweight of pure gold, multiply by the purity of the karat, and divide the buyer's quote by that figure. The result is the share of melt value you are being paid.
Are stones included in the weight?
They should not be. Stones, steel clasp coils and other non gold parts are removed or deducted before the gold weight is used. Diamonds and gemstones are valued separately.