Our 101 guide to understanding how your gold is checked, valued, and used to work out your loan amount. Read on.
If you have some gold jewellery at home and need extra money, you may have come across the option of taking a loan against gold. But before a lender can give you a loan, you need to answer one important question: how much is your gold actually worth?
You may have a necklace, ring, bracelet, gold coin, or even broken jewellery. You know it is made of gold, but that does not automatically tell you how much you can borrow against it. The gold first needs to be checked for its weight and purity, and its value is then considered against the current market price of gold.
Our 101 guide will walk you through how gold valuation works for a gold loan, what affects the amount you can borrow, and what you can expect when you take your gold to a lender. Let’s dive in.
How buyers calculate your gold’s value
A trusted gold buyer in Brisbane will assess your gold to ascertain its worth based on three major factors:
- the weight of your gold item,
- purity of your gold item, and
- the live market rate of gold at that time
In Australia and most global markets, gold prices are quoted in troy ounces, while in countries like India, gold is more commonly measured and sold by the gram. Gold purity indicates the percentage of gold content in any item. Most jewellery is not made purely of gold. Gold is mixed with different materials to make it tougher, since gold is a soft metal by nature.
The market price is the live global price for gold, which changes throughout the day and can be looked up online at any time.
Hence,
Gold Value = Weight (grams) × Purity (%) × Current Gold Price (per gram)
Let’s assume:
- Weight of your gold = 1 troy ounce (approximately 31.1 grams)
- Purity = 75% (18K gold)
- Gold Price (live market rate) = AUD 100 per gram
Your gold’s value = 10 × 0.75 × 100 = AUD 750
*Please note that most gold buyers will offer a percentage of this value (called payout rate), not the full 100%, because they factor in refining and business costs.
How do lenders test gold?
You may have seen a small number or stamp on your jewellery that says something like 750 or 916. These markings can give an indication of the purity, but a professional valuation should not rely only on a stamp. Trusted dealers always use XRF testing to assess your gold’s actual worth and ensure you get a fair deal.
XRF stands for X-ray fluorescence. It is a non-invasive testing method that uses X-rays to analyse the composition of a metal and help determine its gold content. This provides a more reliable assessment than relying on a jewellery stamp alone.
You may see a small number or stamp on your jewellery, such as 750 or 916. These markings can indicate the item’s purity, but they should not be the only basis for a valuation. At Cash Your Gold, we use XRF testing along with certified weighing equipment to assess your gold’s purity and weight before calculating its value.
Does the purity of your gold affect how much you can borrow?
Yes, it can. Think of it this way. You have two gold chains, and both weigh 10 grams. One is 18K gold, which contains around 75% pure gold. The other is 22K gold, which contains around 91.6% pure gold.
Even though both chains weigh the same, the 22K chain contains more pure gold. This means its underlying gold value can be higher.
This is why a lender does not simply look at the number on the weighing scale. It needs to consider both how much the item weighs and how much actual gold it contains.
Here’s a table showing the different gold purities by karat, so you can see how purity affects the value of your gold.
| Gold purity | Approximate gold content |
| 9K | 37.50% |
| 14K | 58.50% |
| 18K | 75% |
| 22K | 91.60% |
| 24K | 99.90% |
Do I keep ownership of my gold with a gold loan?
This is one of the biggest reasons people consider a gold loan instead of selling gold. With a gold loan, you use your gold as security to borrow, rather than selling it permanently. With Cash Your Gold’s Gold Loan offering, your precious metal, like gold, is kept securely while the loan is active and returned once the loan is repaid.
A gold loan may be an option when your gold has sentimental value, such as your mother’s necklace, a wedding chain, or a family gold coin that you don’t want to permanently give away. If you have a genuine need for short-term funds and are confident you can repay the loan, borrowing against your gold may give you access to money without permanently selling the item.
However, you should always understand the loan agreement, repayment requirements and what happens if you do not repay before taking the loan.
Cash Your Gold’s actual interest rates as of 2026
Cash Your Gold offers gold loan services with no hidden fees or surprises, and rates are available for 4 loan durations: 7 days, 14 days, 30 days, and 90 days. Our gold loan rates decrease as the loan amount increases, meaning larger loans attract lower interest rates. Here’s a table for your quick view.
| Loan Amount | 7 Days | 14 Days | 30 Days | 90 Days |
| AU$200+ | 5% | 6% | 10% | 10% |
| AU$1,000+ | 4% | 5% | 8% | 8% |
| AU$4,000+ | 3.50% | 4% | 7% | 7% |
| AU$7,000+ | 3% | 4% | 6% | 6% |
| AU$10,000+ | 2.50% | 3% | 5% | 5% |
| AU$20,000+ | 1.50% | 2.50% | 4% | 4% |
| AU$30,000+ | 1.50% | 2% | 3% | 3% |
Please note that loan eligibility, valuation, and final loan amount are subject to the live market price of gold at the time of assessment.
How gold loan interest is calculated
Understanding how the interest is calculated is one of the most important things you can do before taking a gold loan. It’s not complicated, and once you see it laid out simply, you’ll be much better placed to compare offers from different lenders.
Let’s say you bring in some gold jewellery and Cash Your Gold values it at A$3,500. We offer you a loan of $2,000, which falls in the A$1,000+ tier. You want the money for 30 days while you sort out your finances.
Here’s the calculation:
- Loan amount: AU$2,000 (in the AU$1,000+ tier)
- Loan duration: 30 days
- Interest rate for this tier and duration: 8%
- Interest charged: 8% of $2,000 = $160
Total to repay at the end of 30 days: AU$2,160. You get your gold back.
If you needed to extend the loan by another 30 days, you’d pay the $160 interest at the end of the first 30 days to roll it over. At Cash Your Gold, we allow extensions with no questions asked. You can pay the previous period’s interest, and the loan continues for another cycle.
Final Thoughts
If you’re looking for a gold loan in Brisbane, you may have some questions about how your gold will be valued and how much you could borrow against it. Because your gold is used as security for the loan, no credit check is required. Once we have assessed your gold, we can explain how we arrived at the valuation and the loan amount available to you.
If you’re not sure whether your gold is suitable, that’s completely fine. You can bring it in for an assessment, ask any questions you may have, and take the time to understand your options before deciding whether you want to proceed.
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Frequently Asked Questions (FAQs)
Q: How is gold valued for a gold loan?
A: At Cash Your Gold, we value your gold based on its weight, purity and the current market price. The amount you can borrow is then determined based on these factors and the applicable loan terms.
Q: What factors affect the value of gold used as loan security?
A: The main factors are the weight and purity of the gold and the current market price. The lender’s own criteria also affect the final loan amount.
Q: Does the purity of my gold affect the loan amount?
A: Yes. Higher-purity gold contains more actual gold, so it may have a higher underlying value, depending on the weight and purity of the item.
Q: How do lenders test gold before approving a loan?
A: Professional gold buyers and lenders can use testing equipment such as XRF to check the composition and purity of the metal. Cash Your Gold uses XRF testing and certified weighing equipment for its gold loan valuations.
Q: How much can I borrow against my gold jewellery?
A: There is no single amount for every piece of jewellery. The loan amount depends on factors such as the weight, purity and live market value of the gold, plus Cash Your Gold’s lending criteria.
Q: Does the current gold price affect my loan valuation?
A: Yes. Gold prices change over time, so the current market price is considered when your gold is assessed.
Q: Can damaged or broken gold jewellery be used for a gold loan?
A: It may be possible, depending on the item and Cash Your Gold’s criteria. Broken or damaged jewellery can still contain valuable gold, so it is worth having it assessed rather than assuming it has no value.
Q: How long does the gold valuation process take for a loan?
A: The time can vary, but Cash Your Gold provides most customers with cash within minutes after the valuation is completed.
