How to Sell Gold for a Fair Price
To sell gold well, get the piece tested, know its fine-gold content and compare offers from at least two or three buyers. Every buyer works from the same formula: net weight × purity × the day's gold rate, minus their deductions. The deductions, not the headline rate, are where offers differ most.
How the payout is calculated
Payout = net gold weight × tested purity × buyer's rate for fine gold − deductions (melting loss, testing, margin)
- Net weight excludes stones, beads, lac, enamel and hollow fillings. Buyers either remove stones or estimate their weight.
- Purity is what the buyer's test shows, not what you were told when you bought. A hallmarked 22K piece should test at about 91.6%.
- Rate is usually the buyer's 24K buying rate, which sits below the selling rate shown on boards and apps.
- Deductions cover melting losses, testing and the buyer's margin. They are often quoted as a percentage of the gold value.
Making charges and GST paid when you bought jewellery are not refunded. That is why selling a recently bought piece often returns noticeably less than its price.
Worked example (illustrative rates)
Suppose you sell a hallmarked 22K chain with a net weight of 20 g. The buyer's 24K buying rate is ₹13,400 per gram and the deduction is 2%.
| Step | Calculation | Amount |
|---|---|---|
| Fine gold content | 20 g × 0.916 | 18.32 g |
| Gold value | 18.32 g × ₹13,400 | ₹2,45,488 |
| Deduction | 2% of ₹2,45,488 | ₹4,909.76 |
| Payout | ₹2,40,578.24 |
A US example works the same way: 10 g of 14K scrap at an illustrative spot price of US$133 per gram holds 5.85 g of fine gold worth US$778.05; a dealer paying 85% of melt value would offer US$661.34. Run your own numbers in the scrap gold calculator with the live price.
Where to sell
| Option | Best for | Watch out for |
|---|---|---|
| Exchange at a jeweller (old for new) | Buying new jewellery anyway | Good gold credit can be offset by high making charges on the new piece |
| Buy-back at the original jeweller | Pieces with the original invoice | Cash buy-back usually carries a larger deduction than exchange |
| Bullion dealers | Coins and bars, especially with assay certificates | Pay close to the market for recognised products; less for jewellery |
| Refiners | Larger lots of scrap | Minimum quantities; payout after assay |
| Online mail-in buyers | Small scrap lots where no local buyer is fair | Low first offers; insure shipment and confirm the return policy |
| Pawnbrokers, cash-for-gold shops | Speed | Often the widest deductions |
Loan instead of sale
If you need cash temporarily and want to keep the jewellery, a gold loan from a bank or licensed lender may make more sense than selling. In India, gold loans are offered against a portion of the gold's value and are repaid with interest; if you default, the lender auctions the pledged gold. Compare the interest cost with the deductions you would lose by selling and buying back later.
Typical deductions
Exact policies vary by buyer and change often; these are typical ranges, not quotes:
- Exchange for new jewellery at the same chain: often 0–2% for hallmarked pieces.
- Cash buy-back at a jeweller: often a few percent more than exchange.
- Unhallmarked jewellery or another shop's pieces: larger deductions or a lower tested purity.
- Dealers buying scrap in the US: commonly 70–90% of melt value, with higher percentages for larger lots.
Step-by-step
- Check the live rate on our India gold rate or spot price page before you go.
- Sort pieces by karat and weigh them at home if you can.
- Get an independent purity test (see how to check gold purity), especially for unhallmarked pieces.
- Ask each buyer for the rate, tested purity, net weight and deduction separately, in writing.
- Watch the melting or XRF process if it happens on site and keep any test slip.
- Bring ID and the original invoice if you have it; licensed buyers in most countries must record seller identity, and the invoice helps for tax.
- Prefer a bank transfer for large amounts; many countries limit cash payments.
Tax on selling gold
Most countries treat profit on selling gold as a capital gain: the sale proceeds minus what you paid. Keep purchase invoices, inheritance records or valuation reports so you can prove your cost. Rules differ widely, so check with a tax adviser for large sales.
- India: for physical gold held more than 24 months, long-term capital gains are taxed at 12.5% without indexation (the rate that applies to sales after the July 2024 budget). Gains on gold held 24 months or less are added to your income and taxed at your slab rate.
- United States: physical gold is treated as a collectible, so long-term gains (held more than one year) are taxed at a maximum federal rate of 28% rather than the usual long-term capital gains rates. Short-term gains are taxed as ordinary income.
Exchanging old gold for new jewellery is still a sale for tax purposes in many systems, even when no cash changes hands.