How Scrap Gold Pricing Works: What Dealers Look At When You Sell

If you've ever wondered how a gold buyer comes up with an offer for your jewelry, dental gold, or other scrap items, the process is more straightforward than most people think. There's no mystery formula — it comes down to three things: weight, purity, and the current spot price of gold.

Weight

Every item is weighed on a certified, state-inspected scale. In the precious metals industry, weight is measured in troy ounces (31.1 grams) or pennyweights (1.555 grams). Some shops use grams, which is fine — what matters is that the scale is accurate and legal for trade.

Florida law requires businesses buying and selling precious metals by weight to use "legal for trade" scales registered with the Florida Department of Agriculture and Consumer Services for inspection. These scales undergo stringent testing and must meet National Type Evaluation Program (NTEP) certification standards. If a buyer's scale isn't marked as legal for trade or they can't show a current state registration, that's a red flag.

If your item contains non-metal components like stones, clasps with steel springs, or watch mechanisms, a good dealer will account for those. At Florida Gold Exchange, we estimate the weight of foreign materials and, when possible, remove and return larger stones before finalizing an offer.

Purity (Karat)

Not all gold is created equal. Pure gold is 24 karat (24K), but most jewelry is alloyed with other metals for durability. Here's what the common karat stamps mean in terms of actual gold content:

Karat	Fineness	Gold Content
8K	333	33.3%
9K	375	37.5%
10K	417	41.7%
14K	583/585	58.3–58.5%
18K	750	75.0%
22K	916	91.7%
24K	999	99.9%

A 14K ring contains just over half its weight in pure gold. You'll see both 583 and 585 stamped on 14K jewelry — the pure math is 14÷24 = 58.3%, but many manufacturers (a trend that started in Europe) alloy slightly above the 14K minimum, resulting in a true purity closer to 58.5%. Both hallmarks represent 14 karat gold. The rest of the weight is copper, silver, zinc, or other metals depending on the alloy — which is also why white gold, rose gold, and yellow gold can all be the same karat but look completely different.

For silver, common fineness markings include:

Marking	Name	Silver Content
.800	Jewelry Silver	80%
.900	Coin Silver	90%
.925	Sterling Silver	92.5%
.958	Britannia Silver	95.8%
.999	Fine Silver	99.9%

Dealers verify purity through a combination of methods including acid testing, electronic conductivity testing, X-ray fluorescence (XRF) analysis, and visual inspection of stamps and hallmarks. At Florida Gold Exchange, our primary verification tools include the Sigma Metalytics PMV Pro and the Niton XRF Precious Metals Analyzer — both of which provide non-destructive testing on most items.

One important caveat about XRF: it reads the surface composition of an item, not necessarily the bulk metal. Some jewelry has been treated in ways (such as surface annealing or acid washing) that enrich the gold concentration at the surface, making XRF readings deceptively high. This is one reason dealers can't rely on a single test for jewelry — cross-referencing XRF with acid testing, electronic conductivity, and physical inspection provides a more accurate picture. For standard-shape, standard-alloy products like bullion coins and .9999 bars, XRF readings are highly reliable. For alloyed jewelry with unknown compositions and irregular shapes, no single instrument provides conclusive results.

Heavy or unstamped gold jewelry may need to be filed, drilled, or cut to verify content before a purchase is finalized, but we'll discuss that with you before proceeding.

Items without stamps aren't automatically worthless — they just need to be tested. You can view our full Metal Content & Purity Chart for a visual reference.

Spot Price

The spot price of gold is the current global market price for one troy ounce of pure gold. It fluctuates throughout the trading day based on supply, demand, and broader economic factors. At Florida Gold Exchange, our spot prices update every 10 seconds during market hours, so your offer reflects real-time pricing.

Putting It All Together

Here's the basic math behind a scrap gold offer:

Weight (in troy ounces) × Purity (%) × Spot Price = Theoretical Melt Value

For example, if you bring in a 14K gold chain that weighs 1 troy ounce:

1.0 oz × 58.3% × $3,000/oz spot = $1,749 theoretical melt value

The dealer's offer will be a percentage of that theoretical melt value. You'll see online calculators and competing ads suggesting you should receive 90% or more of melt. But that number is misleading if it doesn't account for what "melt value" actually means after refining — and what it costs a dealer to buy scrap gold responsibly in the state of Florida.

Why the Offer Is Less Than the Calculator Says

The gap between theoretical melt value and your offer isn't just "dealer margin." It reflects real costs and risks that most online calculators ignore entirely.

Melt loss. The theoretical value assumes every gram of your item is the stated karat, with no non-gold material. In reality, jewelry contains solder, metal springs, replaced clasps, stone weight, and other foreign material that gets lost during refining. Typical melt loss is around 1%, but it can be higher. Beyond that, most jewelry is slightly under-karated — a piece stamped 14K may test at 13.5K or lower. Online calculators don't account for this, but refineries do.

Florida's 30-day hold requirement. Under Florida Statute Chapter 538, dealers buying secondhand goods (which includes jewelry and flatware) must hold those items for 30 days before they can be melted, refined, or resold. During that 30-day window, the gold price can move significantly in either direction. The dealer is exposed to that market risk with capital tied up in inventory they can't yet liquidate. That's a real cost of money.

Price lock limitations. In the current environment, most refineries won't accept price locks on the small amounts of fine gold contained in a typical scrap jewelry lot. Even when locks are available, they generally won't extend through the full 30-day hold period required by Florida law. This means the dealer often can't hedge their position and absorbs the full price risk.

Compliance and labor. Florida requires meticulous documentation of every scrap gold purchase: photographs, detailed descriptions, and the price paid per item — even for lots purchased as bulk scrap by karat and weight. This is a meaningful labor cost that scales with every transaction.

Stolen goods risk. Under F.S. Chapter 538, items purchased by a secondhand goods dealer may be claimed by law enforcement if they turn out to be stolen property. The dealer has no recourse to recover their payment in that scenario. This risk is baked into the economics of scrap purchasing.

Refinery processing and payment delays. Even after the 30-day hold, refineries in the current market are taking a week or more to process and pay for scrap shipments. That's additional time with capital deployed and earning nothing.

Testing uncertainty. As discussed above, no single instrument can conclusively verify the purity of alloyed jewelry with unknown compositions. XRF surface readings can be deceptively high due to surface treatments. This inherent uncertainty is a risk the dealer assumes — if a lot comes back from the refinery at lower purity than tested, the dealer absorbs the loss.

A reputable dealer will offer the highest percentage of melt they can while accounting for these realities, and they'll be transparent about how they arrived at the number. If a competitor is advertising 98% of melt with no caveats, ask yourself how they're covering these costs — or whether they're understating weight or purity to make up the difference.

What to Watch Out For

A few things that should raise a red flag when selling scrap gold:

Scales that aren't visible to you. You should be able to see the scale and the reading. Some buyers complete the testing and weighing process out of your sight — avoid this whenever possible. At Florida Gold Exchange, all weighing and testing is done in front of you on state-inspected certified legal-for-trade scales.
Items taken to another room. If a buyer asks to take your items to a back area for testing, you risk losing visibility of your property. Your items should remain in your presence throughout the process. For mail-in sellers, we offer dual-camera web meetings so your items remain in view as they're removed from tamper-evident packaging and examined.
Offers quoted as a flat dollar amount without explanation. A good dealer will walk you through the weight, purity, and spot price that produced the offer.
Pressure to sell immediately. "This price is only good right now" is a sales tactic. Spot prices move throughout the day, so offers do fluctuate — but a reputable dealer shouldn't pressure you into an instant decision. If you're not ready to sell, ask for a written offer that includes the metal type, content, weight, and current market price. If a buyer refuses to put any details in writing, check elsewhere.
"We'll mail you a check later." Any reputable buyer should be able to pay you promptly — cash, check, wire, or Zelle.

Ready to Get an Offer?

Walk-ins are welcome at our Fort Lauderdale location Monday through Friday, 10 AM to 3 PM. For larger lots, we recommend scheduling an appointment. You can also sell by mail with a free insured shipping label.