Is it permissible to exchange old gold for new gold while paying the difference in value to the goldsmith?

It is not permissible to exchange low-quality gold for high-quality gold with the payment of a difference, as this is forbidden and is precisely usury (riba). This is indicated by the Prophet's (peace and blessings be upon him) prohibition to Bilal (may Allah be pleased with him) from selling two sa's of low-quality dates for one sa' of good quality dates. The correct approach is to sell the low-quality gold for dirhams, and then use the dirhams to buy high-quality gold.