Scrap Gold
Also: Broken gold, Second-hand gold, Gold scrap
Scrap gold refers to used or damaged gold items - jewellery, dental gold, coins, and industrial residues - that are melted down and refined to recover the fine-gold content.
Scrap gold is the umbrella term for all gold-bearing items that have left their original purpose and whose gold content is to be recovered by melting and subsequent refining. It includes broken or worn jewellery, dental gold alloys, damaged old gold coins, gold-plated electronic components, and production residues from the jewellery trade. The current gold price largely determines when the effort of recovery becomes worthwhile.
What counts as scrap gold?
The term has no legal definition, but the precious-metals trade has settled on the following categories:
| Category | Typical fineness | Examples |
|---|---|---|
| Broken jewellery | 333-750 | Rings, chains, earrings that are scratched or broken |
| Dental gold | 585-900 | Crowns, bridges, inlays from dental alloys |
| Old gold coins | 900-999 | Damaged sovereigns, ducats, 20-mark pieces |
| Industrial / e-waste | 0.5-999 (by fraction) | Contacts, bond wires, circuit boards |
| Semi-finished goods & filings | variable | Forging and milling residues from goldsmiths |
The most common sources for private individuals are jewellery no longer worn, or that has little resale value as an object, along with dental gold removed from old dental work.
Melt value: the decisive figure
Before scrap gold is sold or sent to a refinery, its melt value (also called material value) should be worked out. It follows from gross weight, fineness, and the current spot price:
Melt value = gross weight (g) x fineness (per mille / 1000) x gold price (EUR/g)
A ring with 5 g gross weight and a 585 stamp (= 58.5% gold), at a gold price of EUR 85/g, contains in theory:
5 g x 0.585 x 85 EUR/g = 248.63 EUR melt value
You can work this out quickly with the melt-value calculator — simply enter weight, alloy, and unit.
Buying price vs. melt value
The buying price actually paid out always sits below the theoretical melt value, because buyers price in the following costs:
- Refining charge — cost of melting and refining (typically 5-15%)
- Analysis costs — fineness testing by X-ray fluorescence or sampling
- Trading margin — the buyer's profit mark-up
- Price risk — hedging against price swings until onward sale
In practice, private sellers receive 70-90% of the melt value, depending on provider, quantity, and purity. Comparing offers pays off: refineries generally pay more than pawnbrokers or jewellers because they operate directly in the market. Estimate the payout you can expect with the buying-price calculator.
Determining fineness - before you sell
The stamped fineness hallmark (in carats or thousandths) reports the gold content. If the stamp is missing or illegible, a buyer or refinery can determine the fineness analytically. Common methods:
- Streak test — a quick approximation, accuracy of about plus/minus 5-10 per mille
- X-ray fluorescence (XRF) — non-destructive, very precise, the standard among reputable buyers
- Cupellation / wet-chemical analysis — destructive, highest accuracy, used for larger quantities
Alloys such as white gold, rose gold, or old dental casting alloys contain other metals besides gold (silver, copper, palladium, platinum); their content affects the overall value, since refineries sometimes also pay for the accompanying metals.
Dental gold as a special case
Dental gold rarely consists of a single alloy. Typical gold contents are 60-90% (stamp 600-900), blended with silver, palladium, platinum, and copper. Dental-gold buyers analyse the whole alloy and pay for every precious metal. The dental gold calculator gives a first indication of how much of it is gold.
Recycling and market significance
Scrap-gold recycling is a major pillar of global gold supply. According to the World Gold Council, 25-30% of annual gold supply regularly comes from recycled sources — a share that rises in years of high gold prices, as more owners are willing to sell hoarded scrap gold. This makes recycling an elastic buffer in the market: when the gold price rises sharply, more scrap gold reaches the market and slightly dampens the increase.
For the environment, recycling is preferable to primary mining: processing scrap gold uses far less energy and creates none of the waste heaps or chemical effluent of open-pit and leaching operations at gold mines.
Tax and legal notes
Private individuals selling scrap gold from their own household usually realise a personal disposal. In Ireland, a gain on the sale of bullion or gold items is liable to Capital Gains Tax at 33%, after the annual personal exemption of EUR 1,270, with no holding-period relief. Cash purchases of EUR 10,000 or more trigger anti-money-laundering obligations for the dealer under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010. This text is not a substitute for tax or legal advice — when in doubt, consult a tax adviser.
In brief
Scrap gold is not waste but a measurable raw material: its melt value can be calculated exactly from weight, fineness, and the current gold price. Anyone who knows the material value before selling and compares several buyers achieves noticeably better results than by taking the first offer.