---
title: "What Is Gold Melt Value (and Melt Loss)?"
source: "https://goldealers.co.uk/knowledge/gold/gold-melt-value-loss"
date: "2025-12-02"
---

# What Is Gold Melt Value (and Melt Loss)?

When selling or refining gold, you'll hear the term "melt value" – this refers to the pure precious metal content value if the item is melted down. This article explains melt value and the related concept of melt loss. Goldealers calculates melt value to price your gold fairly, and we account for minimal melt loss due to our efficient processes.

> **Quick Summary:** Melt value is the value of the pure gold in your item based on weight and current price, as if the gold were melted down. Melt loss refers to the small percentage of weight lost during refining due to impurities burning off. Dealers like Goldealers account for minimal melt loss when making offers.

## Melt Value Defined

Melt value represents the intrinsic worth of the precious metal content in your item, regardless of its form, design, or condition.

### What Melt Value Includes

**Pure Metal Content:**
- Actual weight of gold in the item
- Based on verified purity (carat/fineness)
- Calculated at current market prices
- Ignores decorative or sentimental value

**Example Calculation:**
A 10g ring of 18ct gold:
- Weight: 10 grams total
- Purity: 75% (18ct = 750 fineness)
- Pure gold: 10g × 0.75 = 7.5g
- Current price: £50 per gram
- **Melt value: 7.5g × £50 = £375**

[Complete guide to how scrap gold is valued](/knowledge/gold/what-is-scrap-gold-valued)

## Why Melt Value Matters

Understanding melt value helps you recognize what your gold is truly worth when selling as scrap.

### Key Principles

**Equal Melt Value Examples:**
- Broken chain vs intact chain (same weight/purity)
- Damaged ring vs perfect ring
- Outdated style vs modern design
- Tarnished vs polished

**What Doesn't Affect Melt Value:**
- Visual appearance
- Brand names (unless antique/collectible)
- Original purchase price
- Sentimental value
- Age (unless antique premium applies)
- Condition

> This is good news for sellers! Your broken or damaged gold jewellery has the same melt value as identical items in perfect condition. You're not penalized for wear and tear when selling for scrap.

### Decorative Value Exception

In rare cases, items may have value beyond melt:
- Antique pieces
- Designer hallmarks (Cartier, Tiffany, etc.)
- Historical significance
- Collectible coins (numismatic value)

These should be appraised separately before selling for scrap.

## Understanding Melt Loss

Melt loss is the small amount of weight that can be lost during the smelting and refining process.

### What Causes Melt Loss

**Impurities That Burn Off:**
- Solder used in repairs (often lower purity)
- Non-gold alloy components
- Surface contaminants
- Oxidation during heating

**Process Losses:**
- Tiny particles stuck to crucibles
- Residue in furnace linings
- Volatilization of trace elements
- Handling and transfer losses

**Typical Melt Loss Percentage:**
- Well-sorted items: 1-2%
- Mixed scrap: 2-3%
- Heavily soldered items: 3-5%
- Poorly sorted batches: 5-8%

> Professional refineries like those Goldealers partners with achieve minimal melt loss through efficient processes and modern equipment, typically keeping losses under 2%.

### Example of Melt Loss

**Starting Material:**
- 100 grams of mixed scrap gold
- Average purity: 18ct (75%)
- Expected pure gold: 75g

**After Refining:**
- Pure gold recovered: 73.5g
- Melt loss: 1.5g (2%)
- Loss due to solder and impurities

This 2% melt loss is factored into dealer offers.

## Dealer Allowances

Because of melt loss, refineries and dealers account for this when making offers.

### How Goldealers Handles Melt Loss

**Transparent Pricing:**
- Built into our percentage offer
- No surprise deductions after melting
- Upfront quotes that include allowances
- Typically pay 92-95% of theoretical melt value

**Why 92-95% Offer?**
The 5-8% deduction covers:
- Expected melt loss (1-3%)
- Refining costs (2-3%)
- Business operations (2-3%)

### Large Batch Advantages

When we refine large batches together:
- Economies of scale reduce per-unit costs
- More efficient processing
- Better recovery rates
- We can offer higher percentages (often 98%+)

> If you have a substantial amount of gold (over £5,000 worth), contact Goldealers about potential bulk rates. We may be able to offer higher percentages due to processing efficiencies.

## No Surprise Deductions

A reputable dealer structures offers transparently, with all costs accounted for upfront.

### What Good Dealers Do

**Goldealers' Approach:**
1. Test your gold for actual purity
2. Calculate pure gold content
3. Apply current market price
4. Offer a stated percentage (e.g., 92%)
5. **No additional fees or surprise deductions**

The percentage we quote is what you receive.

### Warning Signs of Hidden Fees

❌ **Avoid Dealers Who:**
- Quote 100% of value then deduct later
- Charge separate "testing fees"
- Add "assay charges" after melting
- Deduct for "administrative costs"
- Change offers after receiving items

✅ **Trust Dealers Who:**
- Quote all-inclusive percentages
- No hidden fees
- Transparent calculations
- Written offers before commitment

## Maximizing Your Melt Value Return

While melt loss is inevitable, you can ensure you receive fair value for your gold.

### Preparation Tips

**Before Sending:**
- Remove obvious non-gold items
- Separate different purities
- Note any repairs or solder (usually silver-colored)
- Clean surface dirt (but don't polish)
- Weigh items at home for reference

**Documentation:**
- Photograph items
- Note any known issues
- Keep copies of hallmarks
- Record weights and purities

[Complete guide to preparing gold for sale](/knowledge/gold/how-to-sell-scrap-gold-uk)

### Choosing the Right Dealer

**Important Factors:**

| Factor | What to Look For |
|--------|------------------|
| Testing Method | Professional XRF or assay |
| Price Transparency | Clear percentage stated |
| Hidden Fees | Zero additional charges |
| Melt Loss Allowance | Reasonable (1-3%) |
| Overall Offer | 90-95% of pure value |

## Refining Process Overview

Understanding the refining process helps explain why melt loss occurs.

### How Gold is Refined

**Step 1: Sorting**
- Items separated by approximate purity
- Non-gold elements removed
- Similar items batched together

**Step 2: Melting**
- Gold heated above melting point (1,064°C)
- Items combine into liquid gold
- Some impurities burn off

**Step 3: Assaying**
- Sample taken from melted batch
- Precise purity determined
- Fire assay or XRF analysis

**Step 4: Refining**
- Chemical or electrolytic process
- Removes remaining impurities
- Achieves 99.9% purity

**Step 5: Casting**
- Pure gold cast into bars
- Stamped with purity and weight
- Ready for resale or manufacturing

[What is fire assay and how does it work?](/knowledge/testing/what-is-fire-assay)

### Where Melt Loss Occurs

- **Step 2:** Impurities volatilize
- **Step 3:** Sample removed for testing
- **Step 4:** Non-gold content eliminated
- **Throughout:** Tiny amounts stick to equipment

## Frequently Asked Questions

**Q: What is "melt value" and how does melt loss affect my payout?**  
A: Melt value is the value of the pure gold in your item based on weight and current price, as if the gold were melted down. Melt loss refers to the tiny portion of weight lost during refining due to impurities or alloys burning off. Dealers like Goldealers account for small melt loss (typically 1-3%) when making offers, which is why you receive 90-95% of the theoretical pure gold value.

**Q: Is melt loss the same as dealer profit?**  
A: No. Melt loss (1-3%) is actual weight lost during refining. The dealer's total deduction (5-10%) covers melt loss plus refining costs, testing, insurance, and business operations. Profit is only a portion of the total deduction.

**Q: Can I avoid melt loss by selling coins instead of jewellery?**  
A: Melt loss mainly affects items being refined. If you sell bullion coins (like Sovereigns or Britannias), dealers may resell them directly without melting, potentially offering closer to spot price. However, the same market price principles apply.

**Q: Why don't you offer 100% of melt value?**  
A: No dealer can sustainably offer 100% because of unavoidable costs: melt loss (1-3%), refining fees (2-4%), testing, insurance, and business operations. Offers of 90-95% from reputable dealers like Goldealers reflect fair, transparent pricing.

**Q: Do all dealers have the same melt loss rates?**  
A: No. Professional refineries using modern equipment achieve better recovery rates (lower melt loss) than outdated processes. Goldealers works with LBMA-approved refineries that minimize melt loss through efficient techniques.

## Next Steps

By understanding melt value and melt loss, you can better appreciate the offers you receive and recognize fair pricing. Goldealers prides itself on efficient processes and transparent pricing, ensuring clients receive competitive returns on their gold's true melt value.

**Useful Resources:**
- [How scrap gold value is calculated](/knowledge/gold/what-is-scrap-gold-valued)
- [Tips for maximizing your gold payout](/knowledge/gold/best-price-scrap-gold)
- [How dealers test gold purity](/knowledge/testing/how-is-gold-tested)

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*Published by Goldealers Ltd · https://goldealers.co.uk/knowledge/gold/gold-melt-value-loss*