What is "karat" gold?
Karat (sometimes spelled carat) measures gold purity on a scale of 24. Pure gold is 24k. Lower karats are alloys mixed with metals like copper, silver, palladium or zinc for hardness and colour. The chart below shows the gold content for each common karat:
| Karat | Purity | Common use |
|---|---|---|
| 24k | 99.9% gold | Bullion bars and coins, some Asian jewellery |
| 22k | 91.67% gold | Indian and Middle Eastern jewellery, sovereigns |
| 18k | 75% gold | Premium European jewellery and watches |
| 14k | 58.33% gold | Most US engagement rings and chains |
| 10k | 41.67% gold | Lower-cost US jewellery and class rings |
How the calculation works
Scrap melt value is a straightforward calculation, but you need three numbers: the current spot price of gold per troy ounce, the weight of the item, and the purity. The formula is:
melt value = spot price × purity × (weight in grams / 31.1035)
One troy ounce is 31.1035 grams (it is heavier than a standard avoirdupois ounce, which is 28.35 g). Divide your gram weight by 31.1035 to convert to troy ounces, multiply by spot, then multiply by purity. The calculator above does all this automatically and lets you optionally apply a dealer payout percentage.
Why your dealer pays less than melt
Refiners and pawn dealers profit on the spread between what they pay you and what they receive when the metal is refined and resold. Expect typical payouts of 70-90% of melt value depending on the size of the transaction, the karat, and how much competition there is in your local market. Higher karats and larger lots tend to get the best percentages because refining costs are roughly fixed per batch.
Always ask multiple dealers for a quote. The melt value is your floor for negotiation, not a price they are obligated to pay.
Related guides
- Buying physical gold: bars, coins, premiums and storage
- Coin melt value calculator — Eagles, Krugerrands, Sovereigns and more
- Precious metals unit converter
- Portfolio holdings calculator