How Pawn Shops Test and Value Gold

The counter workflow, in order

Pawnbrokers rarely deviate from the same test sequence, because each step filters out a different class of risk before the shop spends time on the next. The order is designed to eliminate obvious fakes cheaply first, then invest more precise (and more expensive) instrument time only on pieces that survived the earlier checks.

A typical hand-off at the counter runs like this. The clerk takes the piece, glances at the hallmarks under a loupe, runs a magnet across it, sometimes files a small notch on the inside of a shank or the back of a chain clasp, drops nitric acid on the notch, watches the color reaction, and confirms the reading with either a probe-style electronic tester or an XRF gun for higher-value items. Then the piece is weighed on a calibrated scale, and the offer is calculated from weight, purity, and the shop’s current buy discount off spot.

Step 1: Visual inspection and hallmark reading

Every workflow starts with the naked eye and a jeweler’s loupe. The clerk is looking for a quality mark, sometimes called a hallmark, and for a manufacturer or country-of-origin stamp next to it. Common United States quality marks on gold jewelry include 10K, 14K, 18K, 22K, 24K, or the equivalent millesimal purity numbers 417, 585, 750, 916, and 999. On chains and rings that finding is usually inside the clasp, on the inner band, or near the bail on a pendant.

The Federal Trade Commission Jewelry Guides, codified at 16 CFR Part 23, permit a legal tolerance on unplumbed karat gold of one-half karat (three parts per thousand of fine gold) below the stamped karat, and one karat (seven parts per thousand) if the piece has soldered joints. The National Gold and Silver Marking Act (15 USC 291 to 298) requires that any quality mark be accompanied by a registered trademark of the responsible party.

Common visual red flags: a stamp that reads GP (gold plated), GF (gold filled), GEP (gold electroplated), HGE (heavy gold electroplate), RGP (rolled gold plate), 1/20 12K GF, or similar. These are not solid gold. A missing hallmark is not proof of fakeness (many older or handmade pieces have no stamp) but it removes the fastest confirmation and shifts more weight onto the acid or electronic test.

Step 2: The magnet test

A strong neodymium magnet is passed across the piece. Real solid gold, in every karat used for jewelry, is not magnetic. If the piece jumps, sticks, or tilts noticeably toward the magnet, it contains ferrous metal, which means it is either plated over a steel core, is a lower-karat alloy adulterated with iron, or is not gold at all.

What the magnet catches: iron or steel cores under plating, cheap costume jewelry, some counterfeit bars with iron plugs. What it misses: any non-ferrous fake. Brass, copper, aluminum, zinc, lead, tungsten, and silver-alloy fakes all pass the magnet test cleanly. On its own the magnet proves very little, which is why it is a preliminary filter, not a verdict.

Step 3: The acid test (nitric acid on a touch stone)

The acid test remains the workhorse of counter gold verification because it is fast, inexpensive, and delivers a karat range within seconds. The clerk either files a small notch on a hidden surface of the piece or rubs the piece firmly across a black testing stone to leave a metallic streak. A drop of nitric-acid test solution graded for a specific karat (10K, 14K, 18K, 22K) is placed on the streak or the notch.

The reaction is what matters. If the streak dissolves quickly and turns green or milky, the tested purity is below the acid’s grade. If the streak stays bright and untouched, the tested purity is at or above the grade. By stepping up through the acid grades, the clerk brackets the actual karat within one grade above or below.

What acid detects reliably: karat purity of solid gold jewelry within one grade, most fakes made from base metals (they dissolve or discolor), gold plating over base metal on any piece where the notch cuts through the plate. What acid misses or is weak at: distinguishing 22K from 24K reliably without an aqua-regia step, detecting gold-plated tungsten (both surface and interior can read as high-karat gold if the plate is thick enough), any misrepresentation of a piece whose interior is not exposed by the notch.

Step 4: Electronic testers (probe-style meters)

Handheld electronic testers apply a tiny electrical current or measure electrical resistivity at the surface of the piece and estimate the karat from the response. Two families dominate the counter: probe-tip conductivity meters (best known for a fast pass or fail per karat step) and higher-end instruments that measure bulk resistivity through a spring-loaded contact.

Electronic testers speed up the workflow because they do not require a file notch or a drop of acid. They read through very thin plating on jewelry after a quick surface abrasion. The high-end resistivity meters can distinguish gold from most gold-colored substitutes, and can flag heavily plated pieces because the electrical signature differs from solid alloys of the same surface karat.

What electronic testers detect well: karat step of solid gold, most base-metal fakes, thin gold plating (though a heavy plate can still fool the surface-only versions). What they miss: tungsten-cored fake bars and coins (tungsten resistivity is close enough to gold to slip past the cheaper probe meters), heavily plated pieces where the plate is thick enough to satisfy a surface reading. For a deeper look at the difference between surface conductivity meters and bulk-resistivity instruments, see the Goldiew explainer on XRF vs Sigma vs acid testing.

Step 5: XRF spectrometer (X-ray fluorescence)

An XRF gun fires low-energy X-rays at a small spot on the piece and reads the fluorescence spectrum that comes back. Every element emits X-rays at signature energies, so the instrument returns a compositional readout: gold percentage, silver, copper, zinc, nickel, palladium, and any base-metal alloying element present at the tested spot. Modern handheld XRF units used in scrap and precious-metal buying reach an accuracy of about half a percent by mass on the fine-gold reading, on the tested surface.

The critical caveat is that XRF is a surface analysis. The X-rays penetrate the top tens of micrometers of the piece, not through the full body. A gold-plated tungsten bar or coin will read as pure gold on an XRF surface scan because the instrument is only seeing the top plating layer. Reputable buyers of larger bars either drill or cross-cut a piece to expose interior material for a second reading, or use ultrasonic thickness gauging to confirm homogeneity.

What XRF catches: alloy composition within tenths of a percent on the tested surface, mismatch between stamped karat and actual surface purity, presence of unusual base-metal alloying that flags a suspect item. What it misses: any deep interior substitution (tungsten cores are the classic case). For the mechanics of that specific attack and how buyers defeat it, see the deep dive on tungsten fake gold bar detection.

Step 6: Weight on a calibrated scale

Once purity is confirmed, the piece is weighed in grams on a calibrated jeweler’s scale. Commercial scales used for buying gold in the United States are regulated at the state level under Handbook 44 of the National Institute of Standards and Technology, which sets accuracy tolerances by scale class. A scale used for point-of-sale precious-metal transactions must be a legal-for-trade Class II device, which carries a state or county inspection sticker with an expiration date.

What you should look for at the counter: a visible inspection sticker on the scale, a zero-tare that runs in front of you before the piece is placed, and a display that both you and the clerk can read. A shop that weighs behind a partition, or on a scale without a visible sticker, is a shop to walk out of. A legitimate broker weighs each piece separately if you brought multiple items, calls out the number, and writes it on the ticket.

Chains, mounted stones, clasps, and pins should be handled correctly at the weighing step. Weight belongs to gold and only gold; anything soldered on that is not gold (steel spring rings, base-metal safety chains, stones, glue mounts) should be subtracted or excluded from the buy weight, either by disassembly or by an estimated deduction. Ask how the shop is handling any non-gold component before the number is finalized.

Step 7: Karat math to pure grams

Weight in grams by itself does not give the offer. The clerk (or the point-of-sale software) converts gross weight to fine-gold weight by multiplying by the karat purity expressed as a decimal:

• 10K = 0.417 fine (41.7 percent gold)
• 14K = 0.585 fine (58.5 percent gold)
• 18K = 0.750 fine (75.0 percent gold)
• 22K = 0.916 fine (91.6 percent gold)
• 24K = 0.999 fine (99.9 percent gold, typically bullion only)

Worked example on a 20-gram 14K chain. Gross weight is 20 grams. Purity of 14K is 0.585 decimal. Fine-gold weight equals 20 grams multiplied by 0.585, which is 11.7 grams of pure gold. That fine-gold number is what the offer is built from. The gross-weight number is only useful to the shop if it happens to match the fine number (that is, only on 24K bullion, which is rare on the counter).

If you brought a mixed lot of different karats, each piece is calculated separately. Do not let a shop lump a 10K ring, a 14K chain, and an 18K bracelet into a single average karat figure. That practice, sometimes called “melt averaging” at the counter, systematically underprices the higher-karat pieces in the pile.

Step 8: Spot price times purity times discount

The last step is the offer math itself. The shop takes the fine-gold weight, multiplies it by the current spot price of gold per gram (spot is usually quoted per troy ounce, so the shop divides by 31.1035 to get the per-gram figure), then applies a discount to the spot to arrive at the buy price. That discount is where every shop makes its margin.

Typical buy discounts observed across United States shops on jewelry gold:

• General pawn shops: 30 to 60 percent of melt value on the first offer, sometimes lower on smaller items where paperwork eats the margin.
• Dedicated cash-for-gold buyers or scrap gold dealers: 60 to 80 percent of melt for common karats.
• Refiners buying directly by mail: 75 to 95 percent of melt on bulk lots, with the highest percentages reserved for large weights of the same karat.
• Bullion coin buy-backs (American Eagles, Krugerrands, Maple Leafs): 90 to 99 percent of spot, because the resale market is deep and the piece is instantly liquid.

Same 20-gram 14K chain, at a $2,000 per ounce spot price. Spot per gram is $64.30. Fine-gold weight is 11.7 grams. Melt value is 11.7 multiplied by $64.30, which equals about $752. At a pawn-shop discount of 40 percent of melt (a common opening offer), the counter number is around $300. At a scrap-gold-dealer discount of 75 percent of melt, the number rises to about $564. The chain has not changed, and the tests have all confirmed the same 14K purity and same 20 grams. The buyer channel is the whole reason for the price gap.

The single practical takeaway: post one free request on the Goldiew Sell Gold marketplace before you accept a counter number, since verified local and national buyers will bid on the same weight and purity in one place, at zero cost to you.

What each test can and cannot detect

Every test at the counter answers a narrow question. The table below shows what each one is good at and where it fails silently. Understanding this is the difference between accepting an offer that leaves 20 percent on the table and knowing when to say thanks and try the next channel.

The single most important gap in the counter workflow is that no on-counter test reliably catches a well-executed tungsten-cored fake gold bar or coin. XRF sees the plating and reports high purity. Acid sees the plating and reports high karat. Electronic testers can be fooled by matched surface resistivity. Only density (specific gravity), ultrasonic testing, or destructive assay (drill or cross-cut) reveals the interior. If you are moving a high-value bar or a rare coin, either bring it to a specialist buyer with those instruments or expect the pawn shop to discount aggressively to price in the residual risk.