Why Transparency Matters When Selling Gold
When our expert arrives at your home in Bournemouth, Poole, Christchurch, or anywhere across the South Coast with professional testing equipment, the question foremost in your mind is simple: "What will you pay me for this?" The answer involves precise mathematics, current market data, and complete openness about how we arrive at your cash offer.
Too many gold buyers operate behind a veil of secrecy, leaving sellers frustrated and suspicious about whether they have received fair value. At South Coast Jewellers, with over two decades of specialist experience and thousands of satisfied customers across Dorset and Hampshire, we believe transparency builds trust, so we are pulling back the curtain completely on our home-visit gold valuation process.
This article reveals our exact mathematical formula, explains why our offers differ from retail prices, and shows you worked examples with real numbers. By the end, you will understand precisely how we calculate every pound of your cash offer.
From Jewellery to Market Value: How Gold Pricing Works
Your gold jewellery begins life as pure bullion, refined into specific carats, crafted into beautiful pieces, and sold at retail prices that include design, craftsmanship, brand value, and retail margins. When you sell gold jewellery back to the market, this journey reverses.
The fundamental reality is that we purchase gold for its precious metal content, not its retail attributes. Your 18ct gold necklace returns to the bullion market as refined gold, stripped of its original design and brand associations.
This distinction explains why our cash offers reflect scrap gold prices rather than the retail prices you may have originally paid. Understanding this difference is crucial for setting realistic expectations. For a deeper look at testing methods and how purity is assessed, see our companion guide on how to value your gold jewellery.
Why Retail Prices Do Not Apply to Scrap Gold
Retail gold jewellery pricing includes:
- Raw gold cost (typically 5-15% of the retail price)
- Design and craftsmanship fees
- Brand premiums and marketing costs
- Retail margins (often 100-1,000% markup)
- Showroom overheads and staff costs
- Warranty and customer service provision
Scrap gold pricing reflects:
- Current spot gold price
- Gold purity (9ct, 14ct, 18ct, etc.)
- Processing and refining costs
- Market conditions and liquidity
- Buyer's operational margins
This explains why a piece that cost GBP 1,000 at retail might receive a cash offer of GBP 150-300 from reputable gold buyers. The offer reflects the gold's intrinsic metal value in the current market.
The Three Pillars of a Gold Valuation: Weight, Purity, and Market Price
Every gold valuation rests on three fundamental measurements that determine your cash offer with scientific precision.
Pillar 1: Accurate Weight Measurement
Professional standards we bring to your home:
- Portable digital scales accurate to 0.01 grams minimum
- Daily calibration with certified weights before each visit
- Multiple measurements to ensure consistency
- Anti-static brushes to remove debris without affecting weight
Pillar 2: Gold Purity Assessment
Gold purity determines what percentage of your item's weight consists of pure gold versus alloy metals.
British standard gold purities:
- 9ct gold: 37.5% pure gold (375/1000)
- 14ct gold: 58.5% pure gold (585/1000)
- 18ct gold: 75.0% pure gold (750/1000)
- 22ct gold: 91.6% pure gold (916/1000)
How we determine purity during your home visit:
- Hallmark identification -- British hallmarks provide legal certification of gold content. Our UK gold hallmarks guide explains every symbol and what it means for your gold's value
- Electronic testing -- non-destructive electrical conductivity testing equipment brought to your home
- Acid testing -- the traditional touchstone method, destructive only to a tiny scraping
- Professional assessment -- evaluation of colour, feel, and construction in the comfort of your home. We also use these tools to spot fakes and counterfeits, protecting you from unknowingly selling plated items at gold prices
Pillar 3: Current Market Price
Gold prices fluctuate constantly based on global economic conditions, currency movements, and market sentiment. We track live prices throughout the trading day to ensure fair, current valuations.
Our price sources:
- Real-time spot gold feeds from major financial data providers
- Currency conversion from USD to GBP using live exchange rates
- Market spread analysis to ensure competitive offerings
The Mathematical Formula Explained
Here is the exact calculation we use to determine your cash offer, with no secrets or hidden variables.
The Core Formula
Cash Offer = Weight (grams) x Purity Percentage x Live Gold Price per Gram x Our Percentage
Let us break down each component:
- Weight: measured in grams for precision
- Purity percentage: decimal representation of gold content (0.375 for 9ct, 0.750 for 18ct)
- Live gold price: current market price per gram of pure gold
- Our percentage: our pay-out rate, typically 80-100% of the melt value
Worked Example
Suppose you bring us an 18ct gold chain weighing 25 grams and the current spot price is GBP 1,800 per troy ounce (GBP 57.88 per gram):
- Pure gold content: 25g x 0.750 = 18.75g of pure gold
- Melt value: 18.75g x GBP 57.88 = GBP 1,085.25
- Our offer at 90%: GBP 1,085.25 x 0.90 = GBP 976.73
You can replicate this calculation at home using any accurate kitchen scale and the live gold price. The goal is not to be precise to the penny, but to have a ballpark figure before speaking to any buyer.
Why We Pay a Percentage of Spot Price
Legitimate business costs requiring a margin include:
- Professional portable testing equipment and maintenance
- Insurance coverage for high-value home-visit transactions
- Secure transport and mobile operations
- Refining and processing fees paid to bullion dealers
- Staff expertise and professional certifications
- Vehicle maintenance and home-visit operational expenses
- A small profit margin for sustainable operations
How our rates compare across the industry:
- South Coast Jewellers: 80-100% of spot price
- Pawn shops: often 40-60% of spot price
- Online postal services: 50-70% of spot price (plus shipping risks)
- High-street jewellery shops: varies widely, often 40-70%
Our percentages reflect a commitment to fair pricing while maintaining professional standards and business sustainability. Unlike high street shops, we have minimal overheads so can pass those savings directly to you. We actively encourage customers to get multiple quotes — we are confident our prices compete. For local comparisons, see our guide on top-rated jewellery buyers in Dorset.
Why Our Price Differs from Insurance and Retail Values
This question arises in nearly every consultation. The answer requires understanding different valuation purposes.
Insurance Replacement Value vs Scrap Gold Value
Insurance or retail replacement valuations are based on the cost to replace an item with an equivalent new piece. They include full retail markup and current market premiums, account for craftsmanship, design, and brand factors, and are often two to ten times higher than scrap gold value.
Our scrap gold valuations are based solely on precious metal content. They reflect current commodity market prices, exclude design, craftsmanship, and retail elements, and represent immediate cash value in today's market.
For a detailed exploration of this topic, read our guide to insurance valuations versus resale value.
When Jewellery Might Exceed Scrap Value
Certain pieces command premiums above our standard formula:
- Designer pieces: Cartier, Tiffany & Co., and Van Cleef & Arpels classics can be worth 20-100% above scrap value
- Antique and period jewellery: pre-1950s pieces, Art Deco designs, and items by regional makers carry collector premiums
- Exceptional craftsmanship: hand engraving, granulation, and filigree work can add 10-30% to the base value
- Gemstone integration: high-quality stones are assessed separately on top of the gold value
When we identify pieces with potential premium value, we discuss options including consignment sales or specialist auctions that might achieve higher returns. Our expertise goes beyond simply weighing gold — each item is assessed individually for maker, age, and condition premiums. If your collection includes broken or damaged pieces, do not assume they are worthless; the gold content retains its full value regardless of condition.
Market Timing and Gold Price Movements
Global Gold Trading Schedule
- Asian markets: 5:00 PM - 2:00 AM GMT
- European markets: 8:00 AM - 5:00 PM GMT
- American markets: 1:00 PM - 10:00 PM GMT
- Weekend and holiday pricing: based on Friday closing prices
During normal market conditions, gold prices might fluctuate GBP 1-3 per gram daily. During significant economic events, daily movements can exceed GBP 5-10 per gram, directly impacting your cash offer.
Factors That Influence the Gold Price
Key economic indicators we monitor include central bank interest rate decisions, inflation data releases, employment statistics, currency strength indicators, and geopolitical developments. As of early 2026, gold prices remain at historically elevated levels, making this an excellent time to consider selling your gold. For guidance on market timing and seasonal trends, our article on the best time to sell gold covers what to watch for. If you are in the Bournemouth area specifically, our sell gold in Bournemouth guide offers locally relevant advice.
Our Price Guarantee Period
We guarantee quoted prices for two hours from the initial assessment, allowing you time to consider our offer without market risk. For complex valuations requiring additional research, we may extend this guarantee period.
This guarantee protects you from adverse price movements while ensuring we are not exposed to unlimited market risk during extended decision periods.
Book Your Free Gold Valuation Home Visit
Now that you understand exactly how we calculate your cash offer, you can approach the process with confidence. Our home-visit service brings professional testing equipment to your door anywhere across Bournemouth, Poole, Christchurch, Southampton, Portsmouth, and the wider South Coast. There are no hidden fees, no postage risks, and no waiting for auction results -- just a transparent assessment, a clear explanation of our calculations, and an immediate cash offer with no obligation.
Ready to find out what your gold is worth? Get in touch today to book your free, no-obligation valuation. Our enhanced DBS-checked staff are fully insured for your complete peace of mind, and we cover the entire South Coast from Bournemouth to Portsmouth and beyond. We also value silver and precious metals, gemstones, watches, and antiques during the same visit — there is no need to book separate appointments.