Gold? What You Need to Know
By Fred Borgma
nEvery where I
look now-a-days there is someone wanting to buy
my gold. Finally I e-mailed a question to one of
the would be buyers (who e-mailed me) asking
them what percentage of melt value would they
pay me for my gold? I didn't expect them to
answer and they didn't.
There is an old German saying that applies here
- "no answer is an answer".
Recently a local TV station ran a report on gold
buyers due to all the complaints that they were
getting but they missed the boat entirely. They
justified the low gold buyer payments by
comparing them to the high department store
jewelry prices. The high marked up prices for
new jewelry, they explained, was for the design
and art work, marketing costs etc. etc. etc. and
that the scrap value doesn't even come close to
the high dealer mark ups.
All that the TV station did was to stay on the
good side of their advertisers. However they did
not help their viewers one iota. So let me help
those of you who read my blog. When you want to
sell your gold, this is what you must know
before you contact any potential buyer.
Gold fineness is divided into 1000 parts, .999
fine is considered pure gold (and silver). Old
US gold coins are usually .900 fine which is 90%
Gold and silver are weighed using the troy
weight system in which 1 ounce is 31.1035 grams
or 20 pennyweights.
Most jewelry is marked in karat weights like
10k, 14k or 18k. Pure gold is 24k, therefore 10k
= .4166 fine, 14k = .5833 fine, 18k = .750 fine.
In other words, divide the karat weight by 24 to
get the actual fine weight.
Many pieces of old European gold are marked with
just the fineness numbers like .333.
Also with older gold jewelry from the early
1900's to the 1960's there was a legal 1 karat
margin of error allowed which most jewelry
manufacturers took advantage of so you can
safely assume that grandpa's wedding ring which
is marked 14k is really only 13k.
Next weigh the gold item and multiply the weight
by the fineness number and divide the result by
31.1035. The number you get will be the fraction
of an ounce that the pure gold content of the
Multiply that by the price of gold per ounce and
that is your gold melt value.
Now the only question remaining is what will the
gold buyer pay you for the item? If the buyer
offers less than 75% of the actual gold melt
value it is time to find another buyer.
How do you find out the gold price for that day?
Google the name MONEX and go to their site where
they are constantly displaying the current
market price for gold and other precious metals.
Do your homework and keep the buyers honest. And
by the way, you can use the same method the next
time you are buying jewelry to avoid the
needless mark up sellers.
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