Cash for gold works like this: you bring jewelry, coins, or scrap to a buyer who weighs it, tests its purity, and offers you a percentage of the current market price. Most buyers pay between 70% and 90% of melt value and keep the difference as their margin. The transaction usually takes minutes, but the details around purity testing, weight, identification, and taxes decide whether you walk out with a fair price or a bad one.
What Determines Your Gold’s Value
Two numbers set the offer: purity and weight.
Purity is stamped on almost every piece of gold jewelry. Look inside a ring band, near a necklace clasp, or on the back of a pendant for a tiny hallmark. In the U.S., you’ll usually see 10K, 14K, 18K, or 24K, where the number is the parts out of 24 that are pure gold. A 14K ring is about 58% gold; the rest is alloy metals like copper or silver that add strength and color. Some pieces use a decimal stamp instead: .417 for 10K, .585 for 14K, .750 for 18K.
Weight is where sellers often lose money without noticing. Gold trades in troy ounces, not the standard ounces on a kitchen scale. A troy ounce is about 31.1 grams; a standard ounce is 28.35 grams. If a buyer quotes you a price per standard ounce, you could be shortchanged by roughly 10%. Federal weights-and-measures standards require precious metals to be weighed on certified commercial scales.1National Institute of Standards and Technology. NIST Handbook 44 – Current Edition
Before visiting any buyer, check the day’s spot price of gold. As of early 2026, gold trades above $3,000 per troy ounce, though it moves daily. Spot price reflects pure 24-karat gold on global commodity markets. Your jewelry will never fetch the full spot price because it isn’t pure and because the buyer needs a margin. To estimate melt value, multiply the item’s weight in grams by its gold percentage (0.585 for 14K, for example), then multiply by the current price per gram.
How Buyers Test Your Gold
No buyer takes the hallmark at face value. The most common test at smaller shops is the acid scratch: the buyer rubs your item on a dark touchstone to leave a metal streak, then applies nitric acid of increasing strengths. If the streak survives 14K acid but dissolves under 18K acid, it’s 14-karat. Higher-volume operations use electronic conductivity testers or X-ray fluorescence machines that read out every metal in the piece.
Watch the test happen. A reputable buyer works in front of you and explains what the results mean. If someone disappears into a back room with your jewelry and returns with a number, you have no way to verify what was done.
What Buyers Actually Pay
The offer will always be below spot price. For jewelry and scrap, expect 70% to 90% of melt value. Coins and bullion bars usually command higher percentages because they need less processing.
Get at least three quotes before accepting anything. The spread between the best and worst offer on the same piece can reach 30% or more, even on the same day. When you compare quotes, check whether the percentage is before or after fees. Some buyers quote 90% but deduct assaying, refining, or shipping charges. Others roll everything into one number. An 85% offer with no fees can beat a 90% offer with a $50 processing charge, depending on the size of the sale.
ID and Paperwork the Buyer Will Require
Every legitimate buyer asks for government-issued photo ID before paying you. State and local secondhand dealer laws require it, and the buyer records your name, address, ID number, and a description of each item, then shares those records with local law enforcement.
Federal law adds another layer. Precious metals dealers are treated as financial institutions under the Bank Secrecy Act, and the USA PATRIOT Act requires them to maintain written anti-money laundering programs.2Financial Crimes Enforcement Network. Frequently Asked Questions Those programs must include risk assessments, internal controls, independent testing, and employee training.3eCFR. 31 CFR Part 1027 – Rules for Dealers in Precious Metals, Precious Stones, or Jewels
You’ll also sign a seller’s declaration certifying that you own the items legally. Providing false information on that form can bring criminal charges. If you’re selling inherited jewelry, bring any estate documentation you have, since it can also matter for figuring your tax basis later.
Holding Periods and Stolen Property Rules
Most states and many cities require secondhand dealers to hold purchased items for a set period before melting or reselling them, typically two to four weeks. The hold gives police time to cross-check purchases against stolen property reports. If a piece turns up as stolen, it gets seized as evidence, the buyer loses the money paid, and the seller may face charges for receiving or selling stolen property.
For most in-person sales, the holding period doesn’t delay your payment. The buyer pays cash or check on the spot and absorbs the risk. Online refineries handle it differently and may withhold payment until their own testing and any hold period end.
The $10,000 Cash Reporting Rule
If a buyer pays you more than $10,000 in cash for a single transaction or a series of related transactions, the buyer must file IRS Form 8300. Gold qualifies as a “collectible” under IRS rules, which makes it a designated reporting transaction. For those transactions, “cash” includes cashier’s checks, money orders, and bank drafts with a face value of $10,000 or less, not just currency.4Internal Revenue Service. IRS Form 8300 Reference Guide
The reporting duty is the buyer’s, not yours. But if a buyer suggests splitting a large sale into smaller transactions to stay under $10,000, walk away. Structuring a transaction to avoid Form 8300 reporting is a federal crime for both parties.
Taxes on the Sale
The IRS treats gold, silver, and other precious metals as collectibles, and any profit is taxable. What you owe depends on how long you owned the item and what you paid for it.
Hold gold for more than a year and your profit is a long-term capital gain, taxed at the collectibles rate of up to 28%, higher than the 15% or 20% that applies to stocks.5Office of the Law Revision Counsel. 26 USC 1 – Tax Imposed The classification comes from the tax code’s definition, which specifically lists “any metal or gem” as a collectible.6Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts Hold it a year or less and the gain is short-term, taxed at your ordinary income rate, which could be even higher.
Your taxable gain is the difference between what you received and your basis. For jewelry you bought yourself, basis is what you paid at the store. For inherited pieces, it’s generally the fair market value on the date of death. For gifts, it’s usually what the giver originally paid. If you don’t know the original cost, you still have to make a reasonable estimate.
One catch surprises people: if you sell personal jewelry at a loss, you cannot deduct that loss. The IRS treats jewelry as a personal-use asset, and losses on personal property aren’t deductible even though gains are fully taxable.7Internal Revenue Service. Publication 544 – Sales and Other Dispositions of Assets Report collectibles gains on Form 8949 and Schedule D, using the 28% Rate Gain Worksheet for long-term profits.8Internal Revenue Service. Instructions for Schedule D (Form 1040)
Selling Gold by Mail
Mail-in gold services let you ship items to a buyer who tests them and sends an offer. Convenient, but risky. Once your gold leaves your hands, your leverage is gone. If you reject the offer, you’re depending on the company’s return policy to get everything back, and those policies vary.
Verify that the buyer insures the package at full value in both directions. A prepaid shipping label may carry only a fraction of your gold’s worth in coverage, and if the package is lost, that shortfall is yours. Before you mail anything, photograph each item, note the weights if you own a scale, and record all hallmarks. That record matters if there’s a dispute.
Payment usually comes by check or bank transfer after the company completes its assay and any required hold, which can stretch the timeline to several weeks. In-person buyers pay the same day. Online buyers sometimes offer a slightly higher percentage to compensate for the delay, but not always.
Habits That Protect You
A few practices separate sellers who get fair value from those who don’t:
- Get multiple quotes. Three is a minimum; five is better.
- Know your numbers before you walk in. Check the morning’s spot price, weigh your items at home if you have a gram scale, and calculate approximate melt value.
- Watch the scale. The buyer should weigh your items in front of you on a visible, certified scale. If the buyer uses pennyweight (dwt) rather than grams, note that one pennyweight is about 1.555 grams.
- Don’t accept the first offer. Most buyers expect negotiation. If an offer sits well below 75% of melt value with no clear reason, decline and try elsewhere.
- Avoid high-pressure tactics. Any buyer who claims the offer expires in five minutes, or who mocks you for shopping around, isn’t acting in your interest.
- Be wary of gold parties. Home-based buying events add social pressure to an already lopsided transaction, and the host’s commission comes out of what you would otherwise receive.
Selling gold is a one-shot transaction for most people. There’s no inspection period, no contingency, no cooling-off window once you sign. The time you spend understanding purity, weight, and current prices before the sale is worth far more than any tactic you’ll use during it.