The short version: Spot price is the market price for one troy ounce of pure metal. Melt value is how much pure metal your item contains, multiplied by that price.
The gold price you hear on the news and the value of a gold ring are related, but they are not the same number. Two terms explain the gap.
Spot price: the market's per-ounce price
The spot price is what one troy ounce of pure metal trades for on the global market right now, for immediate delivery. It moves throughout the trading day as large buyers and sellers trade. Dealers use it as the starting point for prices, the way a car dealer starts from the sticker price.
Melt value: what the metal in your item is worth
Melt value is the amount of pure metal an item contains, multiplied by the spot price. Three numbers decide it:
- Weight, in troy ounces. See Troy ounces explained.
- Purity: the share of the item that is the precious metal. 14k gold is 58.3% gold, for example.
- Spot price for that metal.
A worked example
Take a 10-gram 14k gold chain, and suppose spot gold were $4,000 per troy ounce (an example, not today's price):
- 10 grams ÷ 31.103 = 0.3215 troy ounces
- 0.3215 × 0.583 purity = 0.1874 troy ounces of pure gold
- 0.1874 × $4,000 = about $750 melt value
Why an offer is below melt value
Melt value is what the pure metal would be worth after it has been refined. Getting there costs money: refining, assay, shipping, insurance and the dealer's overhead. That is why a buy offer is a percentage of melt value. Ask how a dealer gets to their number; at DGX we show you.
When melt value is not the whole story
Some coins and jewelry are worth more than their metal because of rarity, brand or craftsmanship. See Bullion vs. collectible coins.
Questions about your pieces?
Call or text (702) 725-4344, email support@dg-exchange.com, or send us a message.