How to Sell Gold: Where to Sell, How the Price Is Set, and the Tax

How to sell gold comes down to three moves: know the metal’s melt value before the first quote, get several offers in writing, and compare each offer as a percentage of melt value. Every buyer pays a price below the spot price, and the gap is the buyer’s margin. Where to sell gold (a local dealer, an online dealer, a pawn shop, or a mail-in service) changes the process, but not the comparison method. A gain on the sale is taxed as a collectible, at a maximum federal rate of 28%.

Key takeaways

• Melt value (weight in troy ounces × purity × spot price) is the baseline for every offer. Compute it before you take the first one.
• Four buyer types handle most sales: local coin or bullion dealers, online bullion dealers, pawn shops and jewelry buyers, and mail-in “cash for gold” services.
• Get at least three offers in writing and compare each as a percentage of melt value.
• A net gain is taxed as a collectible, at a maximum federal rate of 28%; gold held one year or less produces a short-term gain taxed as ordinary income.

Know the melt value first

Melt value is what the metal itself is worth at the current spot price, and it is the number every offer should be measured against.

Melt value = weight in troy ounces × purity × spot price

One troy ounce is 31.1034768 grams, or 20 pennyweights. Karat expresses parts of gold out of 24: 24K is pure gold, 18K is 18 parts gold and 6 parts other metal, and 14K is 14 parts gold and 10 parts other metal. 14K jewelry is therefore 14/24 gold, about 58.3%.

Bullion coins and bars are marked with their weight and fineness, so the calculation is direct. Jewelry carries a karat mark and has to be weighed and converted.

A hypothetical example, with round numbers: at a spot price of $2,000 an ounce, a 1-ounce bullion coin of pure gold has a melt value of $2,000. Ten grams of 14K jewelry hold about 0.19 troy ounces of gold (10 ÷ 31.1 × 14/24), a melt value of about $375.

Where to sell gold

Four types of buyers purchase physical gold from the public, and each pays a different way.

• Local coin or bullion dealer. Buys bullion coins, bars, and often scrap and jewelry. The test and weighing happen in person at the counter, and payment is immediate.
• Online bullion dealer. Posts buy prices for common products. Selling gold bullion this way means insured shipping, and payment comes after the metal is received and checked.
• Pawn shop or jewelry buyer. Usually pays scrap value, not collector or design value.
• Mail-in “cash for gold” service. The seller gives up control of the items before seeing an offer.

Selling gold coins with collector value is the exception to scrap pricing: a coin dealer may pay above melt value, while a scrap buyer will not.

How the offer is set

Dealers sell above spot and buy below spot, and the difference is the dealer’s spread. Each dealer sets its own spread, according to the CFTC’s precious-metals guidance.

Bullion coins and bars from known mints are the easiest to sell and usually draw the offers closest to spot. Scrap and jewelry are paid on tested gold content only. Stones are not part of scrap value, and deducting an estimated stone weight to set a scrap price is not a legitimate practice, per the Alaska Division of Measurement Standards.

A hypothetical example: an offer of $1,940 on a coin with a $2,000 melt value is 97% of melt. An offer of $300 on jewelry with a $375 melt value is 80% of melt. Percent of melt is the figure to carry from offer to offer; there is no single typical percentage, and the comparison that matters is between the written offers themselves.

Steps to sell gold

Eight steps take a sale from sorting to record-keeping.

1. Sort items by type and karat.
2. Weigh them yourself and compute melt value.
3. Check the spot price the same day.
4. Get at least three offers, in writing. The New Jersey Division of Consumer Affairs suggests three; Alaska’s guidance suggests written estimates.
5. Ask whether each offer is fixed or depends on testing, and whether shipping, insurance, or assay fees come out of it.
6. At a counter, watch the weighing: the scale must show zero before weighing, and it should carry a current Weights and Measures seal.
7. Get a complete receipt showing the buyer’s name and address, the date, the metal, its fineness and weight, and the price paid.
8. Keep the receipt and the original purchase record for tax.

Warning signs

Problems at sale time cluster around opaque weighing, shifting quotes, and high-pressure settings. The New Jersey Division of Consumer Affairs and Alaska’s guidance flag these patterns:

• Phone quotes that change at the counter.
• Items taken out of sight for testing.
• Temporary buying events in hotels or malls.
• “Gold parties” where the host earns a commission.
• Scales without a visible reading or a current seal.
• Unclear conversions between grams, pennyweights, and troy ounces.

The Federal Trade Commission warns that no government agent asks anyone to buy gold bars or hand them to a courier, and a request like that is a scam. See gold IRA scams for how these pitches adapt to retirement accounts.

Taxes when you sell gold

A net gain on the sale is taxed as a collectible, at a maximum federal rate of 28%. IRS Topic 409 sets that maximum rate for net gains from selling collectibles, such as coins. The IRS definition of a collectible includes any metal and any coin, so gold bullion is covered as well. The gain equals the sale price minus the cost basis. Gold held one year or less produces a short-term gain, taxed as ordinary income. State tax is not covered here; it varies by state.

Dealer reporting covers a narrow set of sales. Under the IRS Form 1099-B instructions, a dealer reports a sale of precious metals only when the item is in a form the CFTC has approved for regulated futures contract delivery and the quantity meets that contract’s minimum, and sales by one customer within 24 hours are added together. Most small sales of coins or bars do not meet that test, and dealers interpret the rule differently. Tax is owed on a gain whether or not a form is filed. A tax professional can apply these rules to your own numbers.

Selling gold held in an IRA

You do not sell IRA gold yourself: you tell the custodian to sell, the dealer buys from the IRA, and the cash stays in the IRA with no tax due until it is withdrawn. Custodian fees can apply to a sale. The gold IRA spread and buyback explainer covers the dealer’s buy price inside an IRA, and RMDs and in-kind distributions covers the distribution side.

Related research

• Gold IRA spread and buyback — what the dealer’s margin does to an IRA purchase and sale.
• Gold IRA vs. physical gold — the two ownership routes side by side.
• Gold investing — the broader costs and risks of holding the metal.
• Gold IRA tax rules — the tax treatment behind IRA-held gold.
• Gold IRA RMDs and in-kind distributions — what happens when gold must be distributed.
• Gold IRA scams — the retirement-account version of the warning signs above.
• Gold to silver ratio — how the two metals price against each other, over 66 years of data.
• Gold IRA glossary — short definitions for the terms used across this research.
• IRA-eligible gold — which products an IRA can hold.