Scrap Gold vs Melt Value: What's the Difference and How Much Will Dealers Pay?
If you're selling gold, you'll hear two terms: melt value and scrap value. Understanding the difference — and knowing what UK dealers actually pay — is the key to getting a fair price.
Quick Answer: Melt Value vs Scrap Value
Melt Value
The theoretical value of the pure gold content in your item. Calculated as: weight (g) x purity (%) x spot price per gram.
Scrap Value
What a dealer actually pays you. Always less than melt value. The gap covers refining, testing, overhead, and profit.
Reputable specialist dealers
85-95% of melt
Cash-for-gold shops
50-70% of melt
The gap between the two is the dealer's margin — covering refining, testing, overhead, and profit. On a item with a melt value of £1,000, the difference between a 50% and 95% payout is £450.
Today's UK Gold Prices
9ct per gram
£40.59
18ct per gram
£81.17
22ct per gram
£99.21
24ct per troy oz
£3,366.44
Prices reflect 100% melt value. Dealers pay a percentage of these figures. Updated from LBMA rates.
What is melt value?
Melt value is the theoretical value of the pure gold contained in your item. It assumes the item is melted down, all non-gold material is removed, and the resulting pure gold is sold at today's spot price. It is the ceiling — the maximum your gold could ever be worth based purely on its metal content.
The Melt Value Formula
Melt Value = Weight (g) x Purity (%) x Spot Price per gram
The purity depends on the karat. In the UK, the most common purities are:
9ct
37.5%
14ct
58.5%
18ct
75.0%
22ct
91.67%
24ct
99.9%
Worked Examples (Using Today's Prices)
Example 1: 9ct Gold Chain — 25g
25g x 0.375 x £108.23/g = £1014.66
A typical heavy 9ct chain. At 90% payout, a dealer would pay ~£913.19.
Example 2: 18ct Gold Ring — 8g
8g x 0.75 x £108.23/g = £649.38
A substantial 18ct wedding band or signet ring. At 90% payout, a dealer would pay ~£584.44.
Example 3: 22ct Gold Sovereign — 7.32g
7.32g x 0.9167 x £108.23/g = £726.25
A full gold sovereign. Note: sovereigns often carry a numismatic premium above melt value.
Get Today's Exact Melt Value
Our gold calculator uses live prices updated daily from the LBMA. Enter your item's weight and karat to see its melt value instantly — no sign-up required.
Calculate Your Gold's Melt ValueWhat is scrap value and why is it lower?
Scrap value is the amount a dealer actually pays you for your gold. It is always less than melt value because the dealer has real costs to cover before they can turn your jewellery into profit. Understanding these costs helps you judge whether an offer is fair or exploitative.
Refining Costs
Scrap gold must be melted down and purified to produce investment-grade gold bars. UK refining typically costs £2-5 per gram depending on the batch size and purity. Lower karat gold costs more to refine because more alloy metal must be removed.
Assay and Testing
Every item must be tested to verify its purity before the dealer can price it. Methods include acid testing (cheap but slightly destructive), electronic testing, and XRF analysis (most accurate, but the machine costs £15,000-£30,000).
Risk Premium
Dealers occasionally take losses on misidentified items — gold-plated pieces that pass basic tests, or items with hidden base-metal cores. This risk is priced into every transaction.
Manufacturing Tolerance
There is also a small "tolerance" deduction. Gold jewellery manufactured to UK standards can be up to 1% below the stated fineness (e.g., a piece hallmarked 375 may contain 371.25 parts gold per thousand). Items manufactured overseas — particularly American-made gold — may have up to 5% tolerance. Reputable dealers account for this in their pricing.
Premises and Security
Gold dealers need secure premises with safes, CCTV, alarm systems, and often reinforced counters. Insurance premiums for holding gold stock are substantial.
Compliance and Licensing
UK dealers must comply with anti-money-laundering regulations, maintain customer records, and hold appropriate licences. This requires staff time and legal oversight.
Market Timing Risk
Dealers may hold purchased gold for days or weeks before selling to a refiner. If the gold price drops in that window, their margin shrinks or disappears entirely.
Profit Margin
After all costs, the dealer needs to make a profit. For specialist dealers with high volume, even a 3-5% net margin on each transaction can sustain the business.
The Bottom Line
A dealer paying you 90% of melt value is not keeping 10% as pure profit. After refining costs, testing, overhead, and risk, their actual net margin may be as low as 2-4%. The dealers offering 50-60% are the ones making outsized profits at your expense.
How much do UK dealers actually pay? (% of melt value)
This is the most important table in this guide. The type of dealer you choose has a far bigger impact on your payout than the day-to-day movement of the gold price.
| Dealer Type | Typical Payout | Notes |
|---|---|---|
| Specialist gold dealers | 85-95% | Best rates, test on-site, same-day payment |
| Online gold buyers | 80-92% | Post your gold, payment after testing |
| High street jewellers | 75-85% | Lower rates, convenience factor |
| Pawnbrokers | 60-80% | Immediate cash, but lowest mainstream rates |
| Cash-for-gold shops | 50-70% | Worst rates, high-pressure tactics common |
| Gold parties / home buyers | 40-60% | Avoid - worst value by far |
What does this mean in real money?
Take an item with a melt value of £1,000. Here is what different dealer types would pay:
Specialist dealer (95%)
£950
Online buyer (88%)
£880
High street jeweller (80%)
£800
Pawnbroker (70%)
£700
Cash-for-gold (60%)
£600
Gold party (50%)
£500
The difference between the best and worst option is £450 on the same item. Always compare quotes.
The Scale of the Problem: £1 Billion Lost Every Year
According to industry estimates, UK consumers lose approximately £1 billion per year by selling gold to low-paying dealers. Some high-street cash-for-gold shops pay as little as 15-50% of melt value, pocketing enormous margins. One documented case found a dealer paying just £4 per gram for 9ct gold that was worth £7 per gram at the time — a 43% loss for the seller. The only way to protect yourself is to know your gold's melt value before you walk through any dealer's door.
A 9ct gold chain weighing 30g has a melt value of approximately £1218 (at £40.59/g for 9ct). Here is what different dealers might actually pay:
The difference between the best and worst offer: £572 — nearly half the item's value.
How to calculate melt value yourself (step by step)
You do not need specialist equipment to estimate your gold's melt value. Here is a practical method anyone can follow at home.
Find the hallmark
Look for a stamped number on the item — typically inside a ring band, near a necklace clasp, or on the back of an earring. The key numbers are:
- 375 = 9 carat (37.5% pure gold)
- 585 = 14 carat (58.5% pure gold)
- 750 = 18 carat (75% pure gold)
- 916 = 22 carat (91.67% pure gold)
- 999 = 24 carat (99.9% pure gold)
Use a magnifying glass or your phone's camera zoom. A jeweller's loupe (available for under £5) makes this much easier.
Weigh the item in grams
Digital kitchen scales work for a rough estimate (accurate to 0.5-1g). For better precision, jeweller's scales accurate to 0.01g are available online for £10-£20.
If the item has stones or non-gold parts, the actual gold weight will be slightly less than the total weight shown on the scale.
Look up today's gold price per gram at the relevant purity
Based on today's spot price of £108.23 per gram for pure 24ct gold:
9ct
£40.59/g
14ct
£63.31/g
18ct
£81.17/g
22ct
£99.21/g
Multiply weight by the price for that purity
For example, a 15g item hallmarked 750 (18ct): 15g x £81.17 = £1217.59 melt value.
Or just use our calculator
Our gold calculator does the maths for you using today's live price. Enter weight, select karat, get an instant melt value.
Important Tip
Weigh items separately by karat. Do not mix 9ct and 18ct items on the scale together. Each purity has a different price per gram, so mixing them will give you an inaccurate total. If you are unsure of the karat, separate items by hallmark number and calculate each group individually.
When scrap value is NOT the right comparison
Not everything made of gold should be sold for scrap. Some items are worth significantly more than their melt value because of rarity, brand, age, or craftsmanship. Before you sell anything for scrap, check whether your item falls into one of these categories.
A standard Queen Elizabeth II gold sovereign sells close to melt value. But a rare-date sovereign — say an 1817 George III — can sell for 2-5x melt value or more to coin collectors.
Check the date and condition of any gold coin before selling for scrap. Unusual dates, mint marks, or proof finishes may indicate collectible value. Consult a numismatic dealer, not a scrap gold buyer.
Pieces from Cartier, Tiffany & Co., Bulgari, Van Cleef & Arpels, and similar houses carry a brand premium. A Cartier Love bracelet in 18ct gold has a melt value around £2,000 but resells for £4,000-£6,000+ on the secondary market.
Check with specialist pre-owned luxury jewellery dealers or auction houses before selling branded pieces for scrap.
Victorian, Edwardian, and Art Deco gold jewellery often has collector value above its melt price. The craftsmanship, historical significance, and rarity of the design can matter more than the weight of gold.
Items over 100 years old are especially likely to have premium value. An antique jewellery specialist or auction house valuation (often free) is worth getting before you commit to a scrap sale.
Gold watches from Rolex, Patek Philippe, Omega, Audemars Piguet, and similar manufacturers are almost always worth far more than their gold content. Even less well-known Swiss brands can command premiums.
Always get a specialist watch dealer quote before selling a gold watch for scrap. A gold Rolex Submariner might contain £3,000 of gold but sell for £25,000+ as a watch.
The Rule of Thumb
If the item is from a known brand, is over 100 years old, or is an unusual coin, get it appraised before selling for scrap. A five-minute check could mean the difference between £500 and £5,000.
How to get the best scrap value for your gold
If you have confirmed that your items should be sold for scrap (standard jewellery, broken pieces, non-branded items), these steps will help you maximise your payout.
Always get 3+ quotes from different dealers
Prices vary significantly. Three quotes is the minimum; five is better. Include at least one specialist gold dealer, one online buyer, and one local shop for comparison. The spread between the highest and lowest offer is often 15-25%.
Know the melt value before you walk in
Use our gold calculator to calculate melt value at home. When a dealer quotes you, divide their offer by your melt value to see the percentage. If it is below 80%, walk away.
Separate items by karat before visiting
Group your 9ct, 14ct, 18ct, and 22ct items separately. This makes the dealer's job easier, shows you are informed, and prevents "errors" where high-karat items are weighed together with low-karat pieces and priced at the lower rate.
Ask what percentage of spot they pay
Reputable dealers will tell you openly. "We pay 90% of the London fix" is a clear, verifiable answer. Dealers who refuse to explain their pricing or give vague answers are usually offering poor rates.
Avoid dealers who will not explain their pricing
If a dealer quotes a flat figure without showing you the weight, purity assessment, spot price used, and their percentage, they are probably hoping you will not check. A trustworthy dealer provides a transparent breakdown.
Consider selling online for better rates
Online gold buyers often pay 3-8% more than local shops because they have lower overhead. However, factor in postage and insurance costs, and only use established companies with verifiable track records. Insured Royal Mail Special Delivery is the standard for items under £2,500.
Find Verified UK Gold Dealers Near You
Our directory includes 242+ verified gold dealers across the UK. Filter by location, read reviews, and compare rates in your area before making a decision.
Browse UK Gold DealersFrequently Asked Questions
Why do dealers pay less than melt value?
Because they have real costs to cover. Refining scrap gold back to pure gold costs £2-5 per gram. Testing each item takes time and equipment. Running a secure premises with insurance, staff, and compliance is expensive. And the dealer needs to make a profit after all that. A reputable dealer paying 90% of melt is typically making a net margin of just 2-4% once all costs are covered.
What percentage of melt value should I accept?
80% should be your absolute minimum from any reputable dealer. A fair offer from a specialist is 85-95%. If you are being offered less than 75%, you are almost certainly being underpaid. Get more quotes. The only exception is very small quantities (under 5g total), where the fixed cost of testing may justify a slightly lower percentage.
Is melt value the same as spot price?
No. The spot price is the current market price for one troy ounce (31.1g) of pure 24-carat gold. Melt value factors in your item's actual purity. For example, 9ct gold is only 37.5% pure gold, so its melt value per gram is just 37.5% of the 24ct spot price per gram. Today, the 24ct spot price is £108.23/g, making the 9ct melt value £40.59/g.
Do dealers pay more for 18ct than 9ct gold?
Yes, per gram. 18ct gold contains twice the pure gold of 9ct (75% vs 37.5%), so it is worth roughly twice as much per gram. Today, 9ct is worth £40.59/g and 18ct is worth £81.17/g at 100% melt value. However, the percentage of melt value that dealers pay is usually the same regardless of karat — a dealer paying 90% will pay 90% on both 9ct and 18ct items.
Can I melt my own gold and sell it?
Technically yes, but it is completely impractical. Gold melts at 1,064 degrees Celsius — you need specialist furnace equipment. After melting, you would need to refine the gold to a known purity and obtain an assay certificate before any buyer would accept it. The equipment costs alone would be thousands of pounds. Dealers handle all of this for you, which is exactly what their margin covers.
Is it better to sell gold jewellery to a dealer or melt it myself?
Sell to a dealer. They have the equipment, expertise, and refiner relationships to handle the process efficiently. A reputable dealer paying 90% of melt value is giving you a fair deal — the 10% covers real costs that you would spend far more than 10% trying to replicate yourself. Your time, equipment costs, and the risk of getting it wrong make DIY melting a losing proposition.
How often does the melt value change?
The gold spot price changes every few seconds during London market hours (8am-5pm GMT, Monday to Friday). Your item's melt value moves with it. This is why dealer quotes are typically valid only for that day — or sometimes only for that trading session. If you get a quote in the morning and the gold price drops 2% by afternoon, the dealer's offer will reflect the new lower price.
Why do cash-for-gold shops pay so little?
Cash-for-gold shops have high overheads: prominent high-street locations with expensive rent, heavy marketing spend (those TV ads and leaflets are not cheap), and staff wages. Their business model relies on convenience over value — they target people who want quick cash and do not compare prices. They typically pay 50-70% of melt value, meaning you lose 30-50% of your gold's worth. By comparison, a specialist dealer with lower overhead pays 85-95%.
Ready to Find Out What Your Gold is Worth?
Calculate your gold's melt value using today's live prices, then find verified dealers near you for the best scrap value.
Gold Calculator
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Calculate Melt ValueSell Scrap Gold by Post
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Related Guides
Complete step-by-step guide covering hallmarks, weighing, getting quotes, avoiding scams, and completing the sale safely.
Read the Full GuideUnderstand the difference between 9ct, 14ct, 18ct, 22ct, and 24ct gold — and what purity means for value.
Understand Gold PurityCalculate your gold's melt value instantly using today's live UK gold prices. Supports all karats and weight units.
Calculate Your Gold's ValueBrowse 242+ verified gold dealers across the UK. Find trusted buyers near you with reviews and contact details.
Find Dealers Near YouOverview of all your options for selling gold in the UK — from high street shops to specialist online buyers.
Explore Selling OptionsLearn how to read and understand UK gold hallmarks. Identify purity marks, assay office stamps, and verify authenticity.
Read Hallmarks GuideSources and References
Gold prices sourced from the London Bullion Market Association (LBMA) daily fixing rates, updated automatically.
UK hallmarking information based on The Hallmarking Act 1973 and guidance from the London Assay Office.
Dealer payout ranges based on mystery-shopping research across UK gold buying services and published rate cards from established dealers, cross-referenced with industry trade data.
Refining cost estimates based on published rates from UK-based precious metal refiners including the Royal Mint refinery and Baird & Co.
All information current as of March 2026. Gold prices and dealer rates change daily — verify current figures before any transaction.
Founder & Market Researcher
Taro has been actively investing in precious metals and financial markets for over 15 years. Frustrated by the lack of transparent, accurate gold pricing information in the UK, he built London Gold Exchange as a data-driven resource for fellow investors. The site combines real-time market data, verified dealer information from 242+ UK businesses, and insights drawn from years of hands-on experience in the gold market.
- ✓15+ years investing in precious metals & equities
- ✓Built verified database of 242+ UK gold dealers
- ✓Daily market data analysis and price tracking
Disclaimer: This guide provides general information about scrap gold values and melt values in the UK. Prices, dealer rates, and market conditions change daily. Always verify current rates and terms with individual dealers before committing to any transaction. The worked examples and payout percentages are indicative and based on market research — your actual experience may vary. This content does not constitute financial advice. Consult appropriate professionals for advice specific to your situation. Last updated: March 2026.
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