There are three factors that determine the gold value or melt value of scrap gold.
1. Fineness or Karat.
3. Market price of gold.
Karat or fineness refers to the percentage of gold by weight an item contains. The karat is based on 24 unit scale. 24k being pure gold, so an 18k ring contains 18 parts per gold per 24 units of weight, or 75% gold by weight.
European gold is marked by fineness, instead of 18k an item would be marked 750 meaning 750 parts gold per 1000, or 75% gold.
Karat Fineness European Mark
10k (10/24) = 41.67% 417
14k (14/24) = 58.33% 585
18k (18/24) = 75.00% 750
24k (24/24) = 100.0% or pure gold
Gold, Silver, Palladium, and Platinum are traded in troy ounces rather than Avoirdupois ounces and pounds commonly used in the USA. Troy ounces are a unit of measure that date back to the roman empire. A troy ounce is approximately 10% heavier than an avoirdupois oz.
A pennyweight (dwt) is an simple division of a troy oz. 1 ozt = 20 pennyweight (dwt).
1 troy ozt = 31.1 grams and 1 dwt = 1.555 grams.
The Market price of gold is the third factor that determines the gold value. The price is constantly changing, so If an ozt of 24k gold is trading at $1.800.00 per troy ounce, that equates to $90 per dwt, or $57.87 per gram.
The fineness and weight allow a refiner to calculate the weight of gold they expect to recover. Multiply that by the market price and it gives you a value, when refined. A refiner/gold buyer will then pay a percentage of that gold value.
For example a 10K men's class ring.
Weight = 9.0 dwt
Karat = 10k
Market = $1800 per oz = $90 per dwt
9 dwt x .4167 = 3.75 dwt of fine gold
3.75 dwt x $90 per dwt = $337.50 full market value, any gold buyer is going to pay you a percentage of that value.
A touch stone acid test - allows a gold buyer approximate idea of what the fineness of the piece, otherwise a fire assay or X-ray spectrum analysis by an assayer or refiner can determine a more accurate gold content. For more information refer to Assay and Refining.
1 Troy ounce: 1.09722 Avoirdupois ounces
1 Troy ounce: 20 pennyweight
1 Troy ounce: 31.1033 grams
1 Troy ounce: 480 grains
Troy pound: 12 Troy ounces
Avoirdupois pound: 14.5833 Troy ounces: 16 Avoirdupois ounces
1 carat: .2 grams
1 pennyweight (Dwt): 1.5552 grams