Why You Cannot Sell Gold Jewellery at the Price on the News
Somebody reads that gold hit a record price, digs out an old chain, brings it to a shop, and hears a number that sounds wrong. That conversation happens at our counter most weeks. The offer is usually fair and the disappointment is usually real, because the headline price and your chain are two different things measured two different ways. We buy gold, so we have an obvious stake here. That is why the arithmetic below is written out in full: you can check every step yourself before selling to us or to anyone else.
The headline price describes a refinery bar
The gold price quoted on the news is a spot price. The Royal Canadian Mint defines spot price as the live price at which an asset in an unfabricated form can be bought or sold for immediate delivery. The words "unfabricated form" carry the whole point. The metal being priced is pure gold in large refinery bars, already tested and certified.
How large? The London Bullion Market Association, which sets that standard, requires a Good Delivery gold bar to hold between 350 and 430 fine troy ounces of gold at a minimum fineness of 995.0 parts per thousand, a bar of 10.9 to 13.4 kilograms. Your chain weighs 10 grams and is 58.5 percent gold. Same metal, different product.
The unit is heavier than you think
Gold is priced per troy ounce, which is heavier than the ounce on a kitchen scale. NIST publishes the conversion factors North American gold buyers work from, and a troy ounce is 31.1034768 grams, against 28.35 grams for the everyday avoirdupois ounce. Convert with the wrong ounce and you overestimate your gold by 9.7 percent before you start.
Some buyers quote per pennyweight, which is one twentieth of a troy ounce, or 1.55517384 grams. It is a legitimate unit with a long history in the trade. We quote in grams, because that is the number on the scale in front of you.
Karat is a fraction, and it does most of the damage
Karat measures purity out of 24 parts. The Competition Bureau sets out which quality marks are legal in Canada and their decimal equivalents. Note that 14K is marked .583 here, an older convention describing the same alloy as the .585 on European pieces.
| Mark | Gold content | Canadian decimal mark | Pure gold in a 10 g piece | Gold value at the example price |
|---|---|---|---|---|
| 24K | 99.9% | .999 | 9.99 g | $1,284.74 |
| 22K | 91.6% | .916 | 9.16 g | $1,178.00 |
| 18K | 75.0% | .750 | 7.50 g | $964.52 |
| 14K | 58.5% | .583 | 5.85 g | $752.33 |
| 10K | 41.7% | .416 | 4.17 g | $536.27 |
| 9K | 37.5% | .375 | 3.75 g | $482.26 |
Read the 14K row against the 24K row. Same weight on the scale, and the 14K piece holds a little over half the gold. Expect the headline price on 10 grams and you expect $1,284.74, while the gold in your hand is $752.33. Nobody has deducted anything yet. That is the alloy.
A worked example, step by step
Take a 14K chain weighing 10 grams with no stones. We will use $4,000 CAD per troy ounce throughout. That number is an illustration chosen to make the arithmetic readable, and it is not today's quote. Gold moves daily, so use the real price when you run this yourself.
- Price per gram of pure gold. $4,000 divided by 31.1034768 grams equals $128.60 per gram.
- Pure gold in the piece. 10 grams multiplied by 0.585 equals 5.85 grams of gold.
- Melt value. 5.85 grams multiplied by $128.60 equals $752.33.
- Offer. A buyer paying 80 percent of melt offers $601.86. At 85 percent it is $639.48. At 70 percent it is $526.63.
So the person expecting $1,284.74 is offered around $600, and the whole gap comes down to two things they can verify: the alloy is 58.5 percent gold, and refining costs money. Once you can do steps 1 to 3, you can judge any offer in the city.
Why the refining step costs something
Your chain has to be melted with other scrap, sampled, assayed, and refined back to 995 fineness or higher before it becomes the product the spot price describes. The Royal Canadian Mint defines assay plainly as the testing of gold or silver to determine its fineness or purity. Refineries charge for that, and they charge more per gram for small mixed lots than for large clean ones.
On top of the refining fee, a buyer carries the price risk between taking your gold and settling, pays to test each piece, and needs a margin to stay open. That is the honest composition of the gap. A buyer who will not tell you what percentage of melt they pay is the one to walk away from.
The part that surprises people most: the ring is worth more than its gold
A customer once brought in an 18K ring bought years earlier for about $2,400. The gold in it came to a few hundred dollars. Nothing had gone wrong. Almost everything they paid for was work rather than metal: the design, the casting, the setting labour for each stone, hours of filing and polishing, the stones themselves, and the cost of a shop with a goldsmith on the bench.
None of that survives a furnace. Melting a finished ring destroys every hour of labour in it and leaves the raw material. This is the most useful idea here: retail price and melt value measure different things, and melt value is what a scrap sale pays. A higher karat raises the metal content and changes how the piece wears, which we cover in our guide to gold karat durability.
When we tell people not to sell
We buy gold, and we still turn business away several times a month, because some pieces are worth more whole. Signed and branded work with its box and paperwork can resell far above melt. Antique and period jewellery, particularly hand-made Victorian, Edwardian and Art Deco pieces, is worth more to a collector than to a refinery, and melting one erases something nobody will make again. Good stones can outvalue their mounting. Heavy 18K and 22K chains in wearable condition sell as jewellery.
So we look before we weigh. If your piece falls into one of those groups we say so, and we will tell you where to sell it properly even when that is somewhere other than here. A scrap decision cannot be reversed on Monday morning.
What to bring, and what to ask
Bring everything, including broken pieces, single earrings and anything unstamped. Bring boxes and certificates, because paperwork changes the answer on branded and certificated goods. Expect the testing and weighing to happen in front of you.
Ask any buyer three questions: what karat did you test this at, what does it weigh in grams, and what percentage of melt are you paying? Those answers plus the day's gold price let you check the offer on a phone. If you are still deciding whether to sell, our piece on what a high gold price means for buying jewellery looks at the same market from the other side of the counter.
Pieces from our cases
A selection of what we currently have in fine gold, including work made on our own bench.
Key Takeaways
- The spot price describes pure gold in 350 to 430 fine troy ounce refinery bars, and your 14K chain is 58.5 percent gold, so the alloy alone accounts for most of the gap.
- Gold is priced per troy ounce of 31.1034768 grams, which is heavier than the 28.35 gram ounce on a kitchen scale.
- Melt value is weight in grams multiplied by fineness multiplied by the gold price per gram. A 10 g 14K chain at an example $4,000 per troy ounce holds $752.33 of gold.
- Buyers pay a percentage of melt because scrap must be melted, assayed and refined before it can be sold at market price, and that service is charged for.
- Branded pieces, antique work, and jewellery with good stones are frequently worth more intact, and we will tell you when yours is.
Frequently Asked Questions
Why is the offer for my gold so much lower than the gold price on the news?
Three separate things sit between the headline number and your offer, and the first one is the biggest. The news price is for pure gold, and your jewellery is an alloy. A 14K piece is 585 parts gold in every 1,000 parts by weight, so a 10 gram chain holds 5.85 grams of gold and 4.15 grams of copper, silver and zinc. That alone removes 41.5 percent of the weight before anyone talks price. The second is the unit. Gold trades per troy ounce, which is 31.1034768 grams, heavier than the 28.35 gram ounce on a kitchen scale. The third is refining. Scrap has to be melted, tested and refined back to purity, and the refiner charges for that work, so a buyer pays a share of melt value. Do the karat arithmetic first and most of the surprise disappears.
What does 14K actually mean by weight?
Karat is a fraction out of 24. A 14K piece is 14 parts gold to 10 parts other metal, which works out to 58.5 percent gold by weight. Canada permits the decimal mark .583 for 14K under the Competition Bureau's marking requirements, which is the same alloy rounded down rather than a different one. You will see .585 on European stock and .583 on older Canadian and American pieces. The rest of the metal is usually copper and silver, with zinc or nickel or palladium depending on the colour. Those metals have real value, and it is close to nothing next to gold. So when we weigh a 14K chain, we are weighing the whole alloy and paying on the gold fraction of it. A gram of 14K carries 0.585 grams of gold. A gram of 10K carries 0.417 grams. That ratio drives everything else.
How do I work out the melt value of my own piece myself?
Four steps, and you can do them on a phone. First, weigh the piece in grams, removing any stones and any clasp made of a different metal. Second, find the karat stamp and turn it into a decimal: 999 for 24K, 916 for 22K, 750 for 18K, 585 for 14K, 417 for 10K, 375 for 9K. Third, take the current price per troy ounce in Canadian dollars and divide by 31.1034768 to get the price per gram of pure gold. Fourth, multiply weight by fineness by price per gram. A 10 gram 14K chain at an example price of $4,000 per troy ounce gives 10 x 0.585 x $128.60, which is $752.33 of gold. That figure is the melt value. Your offer will sit below it, because refining is a paid service. Knowing the melt value is what lets you judge whether an offer is fair.
Why does a buyer pay a percentage of melt instead of melt itself?
Because scrap gold is not sellable metal yet. A mixed lot of chains, bent rings and single earrings has to be melted into a bar, sampled, assayed to find the exact gold content, then refined back to purity before anyone will buy it at the market price. Refineries charge for that, and they charge more for small, mixed, uncertain lots than for large clean ones. The buyer also carries the price risk between taking your gold in and settling with the refiner, plus the cost of testing every piece to make sure a stamp is honest. All of that comes out of the gap between what you are paid and melt value. A buyer who offered full melt would lose money on every transaction. Ask any buyer what percentage of melt they pay and how they arrived at your weight and karat. A straight answer to both is the sign of a fair counter.
When is my jewellery worth more intact than melted?
Four cases, and we check all four before we quote scrap. A recognised brand with its box and paperwork often resells for multiples of melt, because the name carries value that the metal does not. Antique and period pieces, especially hand-made Victorian, Edwardian and Art Deco work, can be worth far more to a collector than to a refinery, and melting one destroys something that cannot be remade. Good stones change the answer completely, since a well-cut two carat sapphire or a certificated diamond may be worth more than the mounting holding it. Heavy 18K or 22K chains in good condition sell as wearable jewellery. If we think your piece belongs in one of these groups, we say so, even though it means we buy nothing that day. Selling an antique for its gold weight is a loss you cannot undo.
Does the karat stamp on my jewellery guarantee the gold content?
It is a strong signal and it needs testing. Canadian law says a quality mark has to be truthful, and the Precious Metals Marking Act sets the rules for how articles are described. The Competition Bureau allows a tolerance of 3 parts per 1,000 by weight for gold without solder, and 7 parts per 1,000 where standard solder has been applied. So a stamp is a legal statement with a defined margin. In practice we still test, because unstamped pieces, foreign pieces with unfamiliar marks, plated pieces stamped to look solid, and repairs done in a lower karat all pass through the door. We test with acid on a touchstone, or electronically for higher value pieces. If your gold is what the stamp says, testing costs you nothing and confirms the weight you are paid on. Our guide to Canadian hallmarks explains the marks in detail.
Should I sell my gold or keep wearing it?
Keep it if you wear it. Gold jewellery you use has a value no scrap price captures, and a 14K chain you put on twice a week is doing its job. Sell when a piece has sat unworn for years, when it is broken beyond a sensible repair, when it came to you in a style you will never wear, or when you want the money towards something you will wear. A common and sound middle path is trading old gold towards a new commission, which turns dead weight in a drawer into something you actually put on. We do that regularly, and it also shortens the refining chain, which is one of the arguments in our piece on recycled gold. Before selling anything with a stone, a signature or real age, get it looked at properly. A melt decision is permanent.
Do I need an appraisal before selling my gold for scrap?
For plain gold sold at melt, no. The value is weight times fineness times the gold price, and any honest buyer will weigh and test in front of you, so a paid appraisal adds cost without adding information. Where an appraisal earns its fee is the opposite case: a piece that might be worth more than its metal. Signed work, period jewellery, coloured stones of size, and diamonds above about half a carat all deserve a valuation before anyone mentions melting, because the appraiser is pricing the thing rather than the gold in it. An appraisal also matters if you plan to insure a piece rather than sell it, which our article on appraisal costs covers. The short rule we use at the counter: plain gold, weigh it. Anything with a name, an age or a stone, look at it first.
Sources
- Competition Bureau Canada: Detailed requirements for marking of precious metals
- Justice Laws Canada: Precious Metals Marking Act
- NIST Office of Weights and Measures: Conversion Factors for Precious Metal Sales
- LBMA Good Delivery Rules: Technical Specifications for gold bars
- Royal Canadian Mint: Glossary of Bullion Terms
Data sourced September 2026. The $4,000 per troy ounce figure used throughout is an illustrative example for the arithmetic, not a market quote. Gold prices change daily, so use the current price when you work out your own piece.
Visit Vanhess
We are a family-run studio at 2929 Barnet Highway in Coquitlam, and we designed and made most of what sits in our cases. Bring your old gold in and we will weigh it and test it while you watch, explain how we got to the number, and tell you honestly if the piece is worth more than its metal. There is no charge and no obligation to sell. Call us at +1 (604) 653-6449.
