Precious Basics

If you've never sold precious metal before, the wall you're about to hit isn't a knowledge gap about gold — it's a vocabulary gap. Buyers behind the counter assume you already know what a troy ounce is, what 14K really means, and how the spot price they quote relates to the cash they hand you. Most first-time sellers don't, and the gap costs real money. This page closes it.

Two examples of the cost. A pound of sterling silver weighs 16 avoirdupois ounces on the kitchen scale but 14.58 troy ounces at the buyer's bench — a 9% margin if you don't know the difference, and at $2,500/toz gold that 9% is the difference between leaving with $1,000 or $910 for a heavy chain. Same problem at the karat counter: a seller who walks in saying "I think it's 18-karat-ish" and a seller who walks in saying "stamped 750, 18K, 75% gold, here's spot on my phone" get treated very differently. Below is everything the second seller knows that the first doesn't.

What counts as "precious"

Five metals get the precious label in any normal transaction: gold, silver, platinum, palladium, and rhodium. They share three properties:

• High value-per-mass — rhodium and platinum can run thousands per troy ounce, gold sits in the four-figure range, silver is the budget entry at tens of dollars per troy ounce.
• Worldwide refining markets with tight, public spreads to spot, so a piece in your driveway has a fairly liquid path to a smelter.
• Investment demand that moves prices alongside physical-use demand — your 14K ring is technically the same asset class as a central-bank gold bar.

Two more — iridium and ruthenium — round out the platinum-group metals (PGMs) and trade in the same circles, but you'll almost never encounter them outside industrial settings. The one exception worth knowing: PGMs are the reason a stripped catalytic converter from a junked car is worth real money. If that's how you got here, the recycling-guide auto silo covers cat-converter pricing in detail. For the wider scope of the precious-metals world, the precious metals guide hub is the parent page.

Troy ounce vs avoirdupois ounce

This is the single most-confusing convention in the whole field, and it's the one that costs sellers the most money when they walk in unprepared.

When a buyer says "ounce," always confirm troy or avoirdupois. They almost certainly mean troy — every precious-metals quote you'll ever see, including the live silver price and live gold price on this site, is per troy ounce. But a kitchen scale, a bathroom scale, the sticker on a bag of coffee, and most international shipping software all default to the smaller avoirdupois ounce. The 9% gap between the two is invisible until you're at the counter.

Concrete worked example. You bring in a pound of sterling silver flatware. On a grocery scale, that's 16 avoirdupois ounces. A precious-metals buyer weighs it and writes down 14.58 troy ounces (1 lb = 453.592 g; 453.592 ÷ 31.103 = 14.583 toz). At a $30/toz spot for silver and 92.5% sterling purity, that's 14.58 × 0.925 × $30 = $404.61 of melt value, not the $480 you'd get if you mistakenly multiplied by 16. The unit matters before any other math. Wikipedia's troy weight entry is the cleanest reference if you want the historical why.

Fineness vs karat — two ways to express purity

There are two number systems for the same idea — what fraction of this piece is the pure metal? — and you need both because different parts of the world stamp different ones onto the same kind of jewelry.

• Karat (K) is the parts-per-24 system, used for gold in the US and most English-speaking markets. 24K is pure; 14K is 14/24, or 58.3%.
• Fineness is the parts-per-1000 system, used universally for silver, platinum, and palladium, and used for gold in continental Europe and most of the bullion world. 999 fine is pure; 750 fine is 75%.

The two cross-reference cleanly. Memorize the gold rows because they're the ones you'll meet at the counter:

The same convention extends to silver: 925 fine (sterling, 92.5% silver) is the most common stamp you'll see, and 999 fine is investment-grade bullion. For platinum, 950 is the standard jewelry mark; for palladium, also typically 950. The full mark glossary lives at precious metals grades and purity — that's where you go when you've got a piece in hand and want to know what every stamp on it means.

Spot price, premium, and what you actually pocket

Three numbers move through every precious-metals transaction, and conflating them is how sellers get confused about whether they're getting a fair quote.

Spot is the wholesale benchmark — the price at which large bullion dealers trade unrefined or large-bar metal among themselves. It's set by the LBMA gold and silver fixings (London, twice a day) plus continuous COMEX futures trading in the US. When a financial-news ticker says "gold is up 0.4%," they mean spot. When this site shows a live gold price, that's spot too.

Premium is what dealers add over spot to sell you physical metal — coins, bars, jewelry. American Eagles cost spot plus 4-8% premium because you're paying for the minting, the recognized hallmark, and the ease of resale. Premium is what you pay to buy. It's not what you get when you sell.

Payout is what you actually pocket when selling. For physical jewelry sold to a buyer, you typically receive 80-98% of spot equivalent, depending on purity, piece quality, and whether the buyer is a coin shop, a refiner, or a "we buy gold" mall kiosk. Worked example at $2,500/toz spot gold and a 10g 14K gold ring: weight in toz is 10 ÷ 31.103 = 0.322 toz; melt value is 0.322 × 0.583 × $2,500 = $469; a coin shop paying 88% of melt hands you about $413. If a buyer offers you $250 for the same ring, you walk. The math is fast once you've done it twice.

Reading a precious-metals price chart

Spot is a continuous live market when LBMA and COMEX are open, which is most of the global business day. There are also two daily London fixings at 10:30 and 15:00 GMT — these are reference points used by refiners and large industrial buyers to settle long-dated contracts. They're not tradeable themselves, but they're what most pricing sheets quote.

What "spot" means at a coin shop counter is narrower. Most independent dealers post a morning quote on a chalkboard or screen and may or may not update it during the day. If spot rallies 2% between 9 a.m. and 2 p.m., a small shop probably hasn't moved their board — which can be good or bad for the seller depending on direction. Big national chains and online buyers update continuously; local shops update on a beat. For a deeper read on how the futures market and the physical market interact, the precious metals market context page covers it.

What to do before you walk into a buyer

A short checklist that captures what experienced sellers do without thinking:

• Weigh on a precise scale. A jeweler's scale or a kitchen scale that reads to 0.1 g is the minimum. A bathroom scale is useless — for a 10-gram ring, half a gram is real money. If you don't own one, a $15 pocket scale from any hardware store does the job.
• Identify your karat or fineness. Look inside ring bands, on clasps, on the back of charms. Stamps are usually tiny but always present on real precious metal. No stamp doesn't automatically mean fake — older pieces and some custom work skip it — but it means an acid test or XRF scan will be part of the transaction.
• Know spot before you go. Pull up the live gold price or silver price on your phone and have it on screen when you walk in. A buyer who quotes "today's spot is $2,300" when the screen says $2,500 is either out of date or counting on you being out of date.
• Call ahead about identification and payout-of-spot. Most US states require photo ID for any precious-metals sale. Cash payouts are often capped per visit; large transactions go out as a check or ACH. Ask both questions before you drive.
• Get more than one quote on anything material. For a $50 chain, one quote is fine. For a piece that might be worth $5,000, two or three quotes on a Saturday afternoon will earn you more per hour than your day job.
• Don't argue with the grader on the spot. They've graded ten thousand more pieces than you have. If you disagree, take the piece back and try a refiner instead — see precious metals refining and selling for when a refiner beats a coin shop.

Frequently asked questions