Selling Gold – Things To Know, How To Calculate

2012-07-07 Updated

2012-03-26 Initial Post

I was going through some stuff the other month and found two gold necklaces. Since the gold price was (and still is) very high, and there are "cash for gold" businesses all over the place, I decided to sell the necklaces.The first place I went to back in January, the guy did a quick test and then offered me $500 something and starting putting cash on the counter. I told him I wasn't going to sell right then because I wanted to check a few more places. By the the time I finally walked out, he was up to $1,000 and was very aggressive. That seemed shady to go up $500 in such a short span of time.

The second place I went to, the guy was not very experienced and had to test one necklace several times, even cutting it in two places (with my approval since I was going to sell them anyway and the prices are based on weight not by whole pieces). In the end, he was going to offer me $600 for both necklaces. I didn't accept, since I still wanted to go to one more place. I told him the first guy was going to offer me $800 and he said that some buyers will make you an offer like that to see if you're serious before they do more extensive tests and then offer you a lower price based on the tests.

When I was talking to the second guy, another guy, a supposedly experienced gold buyer with his own gold buying store one block over, stuck his nose into our transaction and said that the one necklace (the one that was tested several times) wasn't real gold, so the other guy got scared and recanted his offer. I wasn't in a rush to sell, so it wasn't a big deal to me other than wasting an hour.

On Monday, March 26, 2012 I had a chance to go to another gold buyer. I told him that I already went to another place and that guy was an amateur so he had to cut up my necklaces to test. I told this guy I wasn't in a hurry and know more about this stuff than the average person. In a few quick minutes, he tested both pieces and we agreed on $1050. This is what I had:

  • 2.8 grams 14k white gold necklace that had a pendant with some cheap stones in it that I didn't care for even though he offered to take them out for me.
  • 15.7 grams 21k yellow gold necklace. He said he wouldn't even take the first piece by itself but since I had this piece, he'd take both.

The weights were close to what the other place had, so I knew that was correct. The last gold spot bid price for that day was $1,691.40.

This guy must have calculated wrong because I've calculated this using a calculator and also Excel and from what I can tell, I really should have gotten between $700 - $800 total, which is what the first two gold buying sites below offer.


One test the buyer will perform consists of rubbing the piece of "gold" on a special stone to get bits of the metal to rub off onto the stone. He'll then put a special chemical on the bits to see the reaction. The chemical applied must be specific to the karat (14k, 18k, 22k, etc) being tested.


Selling gold is like getting a mortgage--rates change every day and there are calculations that aren't easily understood by a layperson. One reliable site for gold prices can be found here: The price is known as the "spot bid price" or simple "spot price." Bid means "buy" which is the highest price that someone would buy gold for on the open market.


The first calculation has to do with weight. The gold price is based on troy ounce, but smaller units of measurement are gram and pennyweight. Here are the conversions from one unit to another:

  • 1 troy ounce (t oz) = 31.1 grams (g)
  • 1 pennyweight (dwt) = 1.555 g
  • 20 dwt = 1 t oz

Kitco has a weight conversion calculator at


The second calculation has to do with actual gold content. A piece that is 99.9% pure gold is considered 24 karat. Gold must be mixed (alloyed) with other metals to make it practical for use in jewelry. Each karat is 1/24 gold so it's a proportional measurement, not an actual weight. It also has nothing to do with the "carat" weight used with gemstones. The more gold content, the higher the karat number.

  • 14 karat (k) = 58.33% gold
  • 18 k = 75% gold
  • 24 k = 99.9 % gold (100% for practical purposes)

Note: It doesn't matter if you have yellow or "white" gold. The karat is still the same. White gold is just alloyed with white metals to make it not as yellow, but the actual gold content is still the same as yellow gold.


To come up with a price, you need to calculate the value of the piece based on its weight and also its actual gold content. As I mentioned earlier, the gold price listed on the exchange is in troy ounce so you need to convert the weight of your piece to t oz. After that you need to figure out the weight of the actual gold content in the piece. So if the piece is 18 k, you'd multiple by .75 since only 75% of that piece is actual gold.

If the spot price of gold is $1,000 and you had 1 t oz of gold, the buyer isn't going to offer you exactly $1,000. You can expect to get somewhere between 70% - 90% of that, from what I've calculated using different gold buying sites. The buyer has to account for overhead and profit, so that's why. But the more gold that you have, the closer to 100% you'll be offered since buying in bulk is more advantageous. And if you have a bar or coin, you’ll most likely get a little more since those are usually 24k gold and are usual one ounce or a fraction of an ounce.

One thing the buyer told me is that even though gold might be stamped 18k, for example, it doesn't have to be exactly 75% gold because the government allows for a small tolerance. So something that's 74.7% gold could legally be stamped 18k. I have not been able to find any US Federal Trade Commission article about this, but I found a jewelers association document that mentions it--see bottom of page 5 of

Because of the tolerance allowance, the buyer can't pay you at the 18k price, for example. That's why you can't expect to get the best price for jewelery. As I mentioned earlier, bars and coins are usually 24k so the buyer doesn't take much risk with those and can give you better prices on them.

If you're selling in person to a store, they will have more overheard than a larger online operation, so you can't expect them to compete with online places. The advantage to selling to a store is that you see the buyer and the testing process in person, and get cash.

If you sell to an online place, they might test a piece and it could be less karat than you thought it was, so if you want to back out of the deal, you'd waste money in shipping and insurance. One reputable online buyer is American Gold Exchange. I have not dealt with them for gold, but have sold them palladium and silver and they gave me great prices on those. In June 2012 they offered me 98% of spot for a 1 oz Credit Suisse gold bar, but I didn't sell to them.

To ship and insure the gold, it'll cost at least $20 and then I'd have to wait a week and then get a check that I have to deposit. So I figured if I can get at least 90% in person at a store (for the gold bar, but maybe 85% for jewelery), that's good enough for me. If I had a larger quantity of gold bars or coins, then it'd be more beneficial to sell to a place like American Gold Exchange.

Check out this nice succinct article about selling gold. Below are some gold buying sites that actually list what they will buy gold for. It's not obvious from these sites what percentage of the gold spot price they're paying, though. Based on my calculations below, I actually got a better deal than any of these sites because the buyer calculated wrong.

This is what I sold for $1,050 total:

21k yellow gold necklace: 15.7 g = 0.505  t oz = 10.095 dwt
14k white gold necklace: 2.8 g = 0.090 t oz = 1.800 dwt

Prices below are from around 4:30 PM Eastern Daylight Time on Monday, March 26, 2012. Last spot bid price: $1,691.40.
21k yellow gold necklace: $704.03 (they only have 22k listed, so I used that)
14k white gold necklace: $80.08
(Pennyweight prices were available, so I used that.)
21k yellow gold necklace: $707.75 (they only have 22k listed, so I used that)
14k white gold necklace: $80.55
(Only troy ounce prices were available, so I used that.)
21k yellow gold necklace: $415.11 (they only have 22k listed, so I used that)
14k white gold necklace: $48.01
(Pennyweight prices were available, so I used that.)
21k yellow gold necklace: $404.23 (they only have 22k listed, so I used that)
14k white gold necklace: $46.65
(Pennyweight prices were available, so I used that.)

The disparity between the first two sites and the last two sites is huge, so I'm sure the prices in the real stores will vary just as much. Make your calculations using these sites before you go into the store so you have some reference. If you don't have a scale, just have one place weight it but don't sell to them. The prices fluctuate during the day, but usually not enough to make a huge difference to a consumer selling a few pieces of gold jewelry.

After my transaction, I deposited $900 of the proceeds (nine $100 bills) and asked the teller to verify that the bills were legit. The  teller looked all of the bills and said they were OK.


I sold some gold recently, for a relative, and I was tired of calculating everything out by hand in the store. So after I got home, I spent a few hours and made a calculator, SellGoldCalculator.xlsx, using Excel 2010. I verified my calculations by hand and also against

All you need to do is enter in the current spot price, the karat, and the weight (I have separate calculators for pennyweight, gram, and Tael). The result will show what you can expect to be paid based on the buyer's overhead. I also have a karat chart showing how much percentage of gold each karat contains. Next to that I have a list of common units of weight for gold.

If you bring SellGoldCalculator.xlsx into the store and do the calculations right there, they won't be able to low-ball you because you will know what percentage of the spot price they're paying for any given karat and weight. I think this will help consumers because these calculations can be confusing to most people and they don't have time to calculate all that out in the store so they feel rushed to take the offer.

Some inexperienced buyers would get confused as well. It's funny that one store I went to the buyer (a young female) didn't know that 20 pennyweight was 1 oz so I was going back and forth with her and she called the owner several times. I ended up going back the next day to deal directly with the owner. I brought my laptop with SellGoldCalculator.xlsx and I think he was caught off guard by me being able to know what percentage overhead he was charging. He wasn't that good with calculations either--he was trying to show me something and I had to tell him to divide 14 by 24 to get the percentage of gold in 14k.

If you found this article or SellGoldCalculator.xlsx useful, please leave a comment.

>> Download SellGoldCalculator.xlsx <<

If I still remembered Java well, I could probably write a calculator applet for this, but I'm not sure if it would work on this WordPress site and I just don't have the time to refresh myself on Java.

Here is a screenshot of SellGoldCalculator.xlsx:

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