The first time most people sell gold, the offer is a shock. The market rate says one thing; the buyer offers noticeably less. Some of that gap is legitimate and unavoidable. Some of it is not, and telling them apart is entirely learnable.
Why any deduction is legitimate
A buyer purchasing your old jewellery is buying raw material, not a finished product. Before that metal is worth the market price to anyone, it has to be:
- Assayed — its actual purity established, which costs money
- Refined — melted and separated from its alloy, which costs money and loses a little metal
- Transported and insured on the way to a refiner
- Financed — the buyer pays you today and recovers the value later, carrying price risk in between
Add a margin for running a business, and a deduction below spot is unavoidable. A buyer paying you exactly the market price would be operating at a loss.
What is not legitimate
Lowballing on karat. Testing your 22K piece and paying for 18K. This is why you should know the karat before you walk in.
Weighing in unfamiliar units without explaining the conversion — quoting per pennyweight to someone thinking in grams, for example, so the number sounds better than it is.
Refusing to weigh in front of you, or weighing out of sight.
Mixing karats. Pooling a 22K chain with 14K earrings and paying the lower rate on the lot.
Vague quotes — "we'll give you a good price for the lot" instead of a rate per gram at a stated purity.
What a fair offer looks like
A reasonable buyer will:
1. Sort your items by karat and weigh each group separately 2. Test purity in front of you, ideally with XRF 3. State the current market rate they are working from 4. State their percentage of that rate, per karat group 5. Give you the arithmetic, in writing, before you agree
The percentage varies by buyer type. High-volume dealers who ship directly to refiners can pay closer to market than a shop that has to sell your gold on to someone else. Pawnbrokers and convenience buyers generally pay the least.
Work out your own number first
Before speaking to any buyer, calculate the metal value yourself:
Metal value = weight in grams × (karat ÷ 24) × current price per gram of pure gold
Our gold price calculator does this for any weight, karat and currency. That figure is not what you will get — it is the ceiling. Knowing it turns an unquantified negotiation into a percentage discussion, which is a completely different conversation.
What does not come back
The hard part for anyone selling jewellery: making charges and wastage are gone. You paid for craftsmanship, and craftsmanship has no resale value as scrap. A piece bought with a 25% making charge starts 25% behind, before the buyer's deduction.
This is the single most useful thing to understand *before* buying, not after. It is why coins and bars — which carry small premiums — are what people buy when the intention is to hold value, and why jewellery is best understood as something you buy to wear, with residual resale value as a bonus rather than a plan.
Where gemstones go
Most scrap buyers pay nothing for stones set in a piece. They value the gold and treat the stones as an inconvenience to be removed.
If your piece has meaningful gemstones, selling it as scrap destroys that value. Such pieces should go to a jeweller or auction house that can value them as jewellery, which is a slower route but a much better one.
Practical steps
1. Sort by karat yourself, using the hallmarks 2. Weigh at home on a jewellery scale so you know what you are carrying 3. Compute the metal value at the current rate 4. Get at least three quotes. Offers vary far more than people expect 5. Ask for the rate and percentage explicitly — not a lump sum 6. Remove sentimental or gem-set pieces from the scrap pile before you go 7. Never sell in a hurry. Time pressure is the buyer's advantage, not yours