How gold is priced
Gold is traded worldwide in US dollars per troy ounce. The spot price is the price for immediate delivery of pure gold in the wholesale market, and it changes constantly while markets are open. One troy ounce is 31.1034768 grams, which is heavier than the everyday (avoirdupois) ounce of 28.35 g.
To value gold in the UK, the calculator converts the dollar price into pounds using the latest reference exchange rate, works out the price of one gram of pure gold, and then adjusts it for the purity of your item.
Carats and hallmarks explained
Carat (ct) measures purity in 24ths: 24 carat is pure gold and 18 carat is 18 parts gold to 6 parts other metals. UK hallmarks show purity in parts per thousand, which is the easiest way to identify your gold.
- The calculator uses carat ÷ 24 as the purity, so 14ct is treated as 58.33% and 22ct as 91.67%; the hallmark standards are minimums and differ only very slightly.
- A UK hallmark is legally required on gold items over 1 gram sold as gold. Items without one may be plated or of uncertain purity.
| Carat | UK hallmark | Gold content | Typical use |
|---|---|---|---|
| 24ct | 999 | 99.9% | Bullion bars, some coins |
| 22ct | 916 | 91.6% | Sovereigns, Britannia coins (older), wedding rings |
| 18ct | 750 | 75% | Fine jewellery, engagement rings, watches |
| 14ct | 585 | 58.5% | Jewellery, especially imported pieces |
| 9ct | 375 | 37.5% | The most common UK jewellery standard |
The formula
Price per gram of pure gold (£) = spot price per troy ounce ($) ÷ 31.1034768 × USD-to-GBP rate
Price per gram at your carat = price per gram of pure gold × carat ÷ 24
Value = price per gram at your carat × weight in grams
Worked example 1: an 18 carat bracelet (hypothetical prices)
10 g of 18ct gold, assuming a spot price of $2,400 per troy ounce and £1 = $1.25581
These prices are made up for illustration; the calculator always uses the latest data.
Pure gold per gram in dollars = $2,400 ÷ 31.1034768 = $77.16
In pounds = $77.16 × 0.796296 = £61.44 per gram
18ct price per gram = £61.44 × 18 ÷ 24 = £46.08
Value of 10 g = £460.83
Worked example 2: a 9 carat chain
25 g of 9ct gold, same hypothetical prices
9ct price per gram = £61.44 × 9 ÷ 24 = £23.04
Value of 25 g = £23.04 × 25 = £576.03 (using the unrounded price)
A buyer offering 70% of melt value would pay about £403.
Worked example 3: a gold sovereign
| Carat | Hypothetical price per gram |
|---|---|
| 24ct | £61.44 |
| 22ct | £56.32 |
| 18ct | £46.08 |
| 14ct | £35.84 |
| 9ct | £23.04 |
One full sovereign: 7.98 g of 22ct gold (7.32 g of pure gold), same hypothetical prices
22ct price per gram = £61.44 × 22 ÷ 24 = £56.32
Melt value = £56.32 × 7.98 = about £449.43
Dealers usually sell sovereigns at a premium above this and buy them slightly below, and rare dates can be worth much more to collectors.
Why you will be offered less (or charged more)
- Buy-back margin: scrap gold buyers, pawnbrokers and jewellers pay less than melt value to cover refining, assaying and profit. Offers between 60% and 95% of melt value are common; online and bullion dealers tend to pay more than high-street shops.
- Retail price: new jewellery costs far more than its gold value because of design, labour, the retailer's margin and VAT.
- Weight of other materials: stones, clasps, springs and solder are not gold; remove them from the weight if you can.
- Bullion premium: coins and bars are sold above spot to cover minting and distribution.
Tax on gold in the UK
- Investment gold (bars and many coins of sufficient purity) is exempt from VAT. Jewellery and scrap gold sold to consumers carry 20% VAT.
- UK legal tender coins such as sovereigns and Britannias are exempt from Capital Gains Tax.
- Gains on other gold, including bars and jewellery, may be liable to Capital Gains Tax, although items treated as personal possessions sold for £6,000 or less are usually exempt.
- Tax rules depend on your circumstances, so check HMRC guidance or ask an adviser before selling large amounts.
Tips before selling gold
- Weigh your items yourself and check hallmarks so you know roughly what to expect.
- Get several quotes, and ask for the price per gram for each carat.
- Check the spot price on the day: it can move by several per cent in a week.
- Be wary of postal schemes that make it hard to get your items back if you reject an offer.
- Antique, designer or signed pieces may be worth more as jewellery than as scrap.