How to price scrap gold accurately
The step-by-step method professional goldsmiths use to calculate exactly what to pay for any karat of scrap gold — and protect their margin every time.
The 4-step scrap gold pricing method
Every professional goldsmith follows the same four steps when offering a price for scrap. Skip any one and you'll either overpay or lose the customer.
- Determine the karat — read the stamp, then verify it (touchstone, acid test, or electronic tester).
- Calculate the pure gold content — weight × (karat / 24).
- Find today's merchant price — the price your supplier or refinery actually pays per gram.
- Apply your profit margin — the margin must cover risk, time, and overhead.
Why merchant price is not spot price
The "gold price" you see on Google or Bloomberg is the international spot price, quoted in USD per troy ounce. That's the wholesale benchmark for traders. Your local merchant always sells higher — typically 3–8% above spot — because they have storage, insurance, spread, and profit to cover.
Most goldsmiths receive a daily SMS or WhatsApp from their merchant with the day's per-gram price by karat. That's the price you build your scrap quote against.
The formula
Buy price = (Weight × Purity%) × Merchant price × (1 − Margin%)
Worked example
Pure gold = 10 × 0.75 = 7.5 g
Gold value = 7.5 × €85 = €637.50
Buy price = €637.50 × (1 − 0.15) = €541.88
Common mistakes
- Using the international spot price instead of your merchant's per-gram rate.
- Forgetting that alloyed gold has impurities — never treat 18K as 100% gold.
- Setting margin too low because a customer pushed back. Your margin pays your bills.
- Skipping karat verification and trusting a worn stamp.
Suggested margin ranges
| Channel | Typical margin |
|---|---|
| B2B (other jewellers, dealers) | 10 – 15% |
| B2C (walk-in customers) | 15 – 25% |
| Scrap / refinery resale | 20 – 30% |
Try this in the Scrap Gold Calculator
Enter weight, karat, merchant price, and margin — Goldify does the math instantly.