How this instrument works
Melt value is what the gold inside an object is worth as raw metal, stripped of any craftsmanship, brand, or collector premium. A pawnbroker weighing a ring, a scrap buyer sorting a coin jar, or a refiner quoting a client all start from the same three numbers: how much the piece weighs, how pure the gold in it actually is, and what an ounce of pure gold trades for right now. Multiply those together and the craftsmanship falls away — what is left is the metal's floor price.
Purity is where most confusion sits. Karat marks describe gold as a fraction of 24 parts: 24K is defined as pure, 22K is 22/24 (0.9167), 18K is 0.75, 14K is 0.5833, and 10K is 0.4167 — the rest of the alloy is copper, silver, or other metal with no gold value of its own. A stamped karat is a manufacturer's claim, not a certified assay, so refiners and pawnshops routinely re-test purity with acid, X-ray fluorescence, or fire assay before paying out, and the measured number can differ from the number stamped on the piece.
The figure this instrument returns is intrinsic value only, not a sale price. It assumes the entire weighed mass converts to cash at the quoted spot rate with zero loss, when in practice refining takes a cut, buyers build in a margin below spot, and the troy ounce used in bullion pricing (31.1035 grams) is heavier than the everyday avoirdupois ounce (28.3495 grams) people default to when estimating weight by eye.
- Weigh the item and enter it under Weight, troy oz — convert from grams first if your scale reads metric.
- Set Purity (0-1, e.g. 0.9167 for 22K) to the fraction of pure gold, using a measured assay over a stamped karat if you have one.
- Enter today's Spot price, $ per troy oz from a live quote.
- Read Melt value — the raw-metal figure the formula returns, before any dealer margin or refining fee is subtracted.
Worked example — one troy ounce of pure gold
Set Weight, troy oz to 1, Purity (0-1, e.g. 0.9167 for 22K) to 1 (24K, the pure-gold reference case), and Spot price, $ per troy oz to 2000. The instrument multiplies 1 × 1 × 2000 and returns a Melt value of exactly $2,000 — no purity discount applies because the gold is treated as fully pure.
Change only the purity to 0.9167, the fraction stamped on most 22K jewelry, and the same ounce at the same $2,000 spot price melts for $1,833.40 instead. The $166.60 gap is the alloy's share of the weight — metal with no gold content and, for melt purposes, no value at all.
Questions
Why is melt value lower than what a jeweler charged for the piece?
Melt value counts only the raw metal; it ignores design, brand, gemstones, and labor, all of which the retail price included. A $2,000 ring might contain $600 of gold — the rest was craftsmanship and markup that a scrap buyer has no reason to pay for.
Why does a stamped karat sometimes not match tested purity?
A stamped karat is the maker's claim, not an independent measurement. Manufacturing tolerances, plating, wear, and occasional mislabeling mean true fineness can differ from the mark by a percentage point or more, which is why refiners re-test with acid or X-ray fluorescence before they pay.
What is a troy ounce, and why does it matter here?
A troy ounce weighs 31.1035 grams, about 10% heavier than the everyday avoirdupois ounce (28.3495 grams) used for food or body weight. Precious-metal markets price exclusively in troy ounces, so entering a kitchen-scale reading without converting first overstates the weight and inflates the melt value.
Does melt value equal what a buyer will actually pay?
No. This is the metal's raw value at spot price with full recovery assumed. Buyers subtract a margin to cover resale risk, and refiners subtract assay and processing fees, so a cash offer typically lands below the number this instrument returns.
Is melt value the same as a coin's collector price?
No — collectible and numismatic coins can carry a premium above their gold content for rarity, grade, and demand, a premium this instrument does not price. It calculates the metal-only floor; a common bullion coin usually trades close to that floor, while a rare date can sit well above it.
References
- IRS Topic No. 409 — Capital Gains and Losses (collectibles rate)
- CFTC Learn & Protect — precious metals fraud education
Read this first: This instrument shows arithmetic, not advice. Real offers add fees, taxes and terms that vary by lender and place — verify the figures against your actual paperwork before deciding anything.