Spot Price vs Buyback Price: Why You Don't Get Paid the Headline Number

Open any finance app and you'll see a single, headline number for gold — currently somewhere around AUD $5,500 per troy ounce. Naturally, the first question most sellers ask is: "Will I get paid that?"

The honest answer is no — and that's true of every gold buyer in the world. Here's why, and how to tell whether the offer you're being made is fair.

What the spot price actually is

The "spot price" of gold is the price at which large institutions buy and sell investment-grade bullion (typically 99.99% pure, in standardised bars) for immediate delivery in major international markets. Two important things follow from that:

1. It's a wholesale, large-volume price.
2. It's for pure gold, not jewellery.

If you're selling a 9K chain that's 37.5% gold, you're never going to get the bullion spot price for it — there's a significant amount of refining and remanufacturing required to turn that chain back into investment-grade metal.

What sits between spot and your offer

Here are the real costs every buyer has to cover before they pay you:

Refining. Scrap jewellery has to be melted down, chemically separated from base metals, and recast into bars. A typical refining margin is 2–5%.

Assay. Every item has to be weighed and tested for purity (we use XRF analysis). That's labour and equipment cost.

Insurance & shipping. Insured Express Post in both directions, plus secure storage during evaluation.

Hedging risk. The gold price can move 1–2% in a single day. If a buyer pays you today and the price drops before they can sell to a refiner, they wear the loss. Most buyers build in a small buffer.

Margin. Like any business, a buyer has to make a small margin to keep the lights on.

For a transparent operator, this typically adds up to a 10–25% gap between spot price and what you're paid for the pure gold content of your items. Anything more than that and you're being overcharged. Anything less and the buyer probably isn't insured or properly licensed.

A worked example

Let's say spot is $5,500/oz (= ~$176/g). You send us a 10-gram 18K ring (= 7.5 g of pure gold).

• Pure gold value at spot: 7.5 × $176 = $1,320
• A fair buyback offer: roughly 80–90% of that = $1,056 – $1,188

If you're being offered $400, you're being ripped off. If you're being offered $1,300+, the buyer probably isn't going to be in business long.

Red flags when comparing buyers

• They won't tell you the spot price they used
• They give you a single dollar figure with no breakdown of weight, purity or pure-gold-content
• They quote a "free evaluation fee" or a "refining surcharge" that gets deducted later
• They pressure you to decide on the spot
• They send a courier to pick up the items the same day they make the offer

How to compare offers fairly

Ask any buyer for these three numbers per item:

1. The weight of the item (in grams, to one decimal)
2. The karat / purity they tested it at
3. The AUD spot price per gram they're using that day

With those, you can do a quick sense-check yourself. A reputable buyer should be happy to share all three — we put them on every offer document by default.

For more on how we calculate offers, see How It Works, or use our Gold Calculator to estimate before you ship.