A broken chain sold over a counter does not get worn again. It joins a stream of rings, dental gold, watch cases and electronics scrap that ends up at a refinery, where the individual objects stop mattering and only one question is asked: how much pure gold is in here? Everything about how scrap is priced follows from the way that question gets answered.
Step one: melting into a single lot
Mixed scrap is not uniform. A bag of jewellery might hold 9K, 14K and 18K pieces, solder joints, plated clasps and the occasional piece of brass that was never gold at all. You cannot measure the gold in a pile like that by testing a few items, so the first step is to melt the lot together into a homogeneous bar or into granules. Once it is one alloy, a small sample genuinely represents the whole.
Melting also changes the weight. Stones, enamel, dirt and other non-metal material burn off or separate as slag, and some base metals oxidise away. The weight that goes in is not the weight that comes out, which is one reason a refiner’s settlement is based on the melted, assayed metal rather than on the weight of the objects handed over.
Step two: assay — measuring what is there
Assay is the measurement step. The reference method for gold is fire assay (cupellation), which has been used in one form or another for centuries. A weighed sample is melted with lead, and the lead is then absorbed into a porous cupel along with the base metals, leaving a bead of precious metal. Silver is then dissolved out of the bead with acid, and the remaining gold is weighed. The ratio of that gold to the original sample weight is the fineness.
Fire assay is destructive and takes time, which is why buyers at a counter use faster methods — usually an XRF analyser, which reads the surface composition without damaging anything, or acid testing. Those are good for sorting. The figure the gold is ultimately settled on at a refinery comes from the assay of the melted lot.
Step three: refining
Refining separates the gold from everything else. Industrial refiners have used two processes for well over a century, and they produce different purities.
The Miller process
Chlorine gas is bubbled through the molten gold. Almost every other metal present reacts to form a chloride, which either evaporates or floats to the top as slag, while gold does not react at that temperature. The result is gold of about 99.5% purity. It is relatively quick and is widely used when the very highest purity is not required.
The Wohlwill process
An electrolytic process. A cast gold anode — already high purity — is placed in an electrolyte of chloroauric acid, and an electric current carries gold across to a cathode, leaving the remaining impurities behind in the solution or as sludge. It produces gold of up to 99.999% purity. It is slower, and it ties up a substantial quantity of gold permanently in the electrolyte, which is why refiners often use Miller first and Wohlwill only where the market needs the higher figure.
Smaller operations sometimes use aqua regia — a mix of nitric and hydrochloric acids that dissolves gold — followed by chemical precipitation. The chemistry differs, but the goal is the same: get everything that is not gold out of the gold.
The other metals are not simply discarded. Silver is the most common by-product of refining gold scrap, and platinum-group metals present in the feed are recovered separately.
What the refined gold becomes
At the wholesale end of the market, gold trades as London Good Delivery bars, made to a specification published by the LBMA. A Good Delivery gold bar must be at least 995.0 parts per thousand fine and contain between 350 and 430 fine troy ounces of gold — roughly 10.9 to 13.4 kg. Each bar carries a serial number, the refiner’s mark, its fineness and the year it was made. Only refiners on the LBMA’s accredited list can produce bars that are accepted as Good Delivery.
Refined gold also goes into smaller investment bars and coins, into new jewellery alloys, and into industrial uses such as electronics. Gold is not used up by any of these in a way that matters to the metal: it does not corrode, so the gold in a refined bar may well have been through this cycle many times before. The unit conversions between troy ounces, grams and kilograms used throughout the trade are in the troy ounce converter.
Why this explains scrap prices
Every step above has a cost: the melt, the assay, the chemistry, the security, and the time the metal spends in process while the gold price moves. Refiners pass these on as charges and as a percentage of metal retained, and the terms differ by refiner, by lot size and by the type of material — high-karat jewellery is simpler to refine than mixed electronics scrap. This site does not publish a figure for those charges, because there is no single published one to cite.
What can be measured precisely is the starting point: the pure gold content of a piece, from its weight and its karat. That is what the scrap gold calculator shows — the metal before any of the costs in the chain. How those costs stack up between you and the refinery is covered in what actually happens when you sell gold.