With commodity prices, particularly gold, heading up to all-time highs, the idea of recouping the value of old gold jewellery or gold scrap – an idea once considered impractical and not worth the effort – suddenly becomes very viable. There are several ways to go about doing this, but the most important thing is to make sure that you receive a fair price for the gold items you are offering to sell. If you do not receive a fair price, selling the gold is not worth your time or effort.
Obviously, in order to make sure you are receiving a fair price, you need to be able to valuate your gold. There are several guides online that will help you do this – however, beware of biased information from sites affiliated with scrap gold outfits. The best way to determine the value of your scrap gold is by following the spot price, although you won’t get the full spot price when selling you items you should expect to get about 75-80%. Generally, a good guide will advise you to separate your gold items according to their karat value. Karat value measures the fineness of gold, i.e. its purity or actual gold content. If you are unaware of the purity or karat of your items, just examine them carefully and look for the hallmark – all karat gold jewellery items should be imprinted with a hallmark, such as “18kt”. The purer the gold, the higher the karat value – 24kt gold is the purest kind, but since it is too soft to be used for everyday wear, most of the highest-quality gold items are actually made of 18kt gold.
The most common hallmarks in North America: 10k or 10kt, 14k or 14kt, 18k or 18kt and 22k or 22kt. In the U.K. and much of Europe they use a variety of similar hallmarks, some numerical and some similar to here in Canada and the U.S they are as follows:
9ct or 375, 10ct or 417, 14ct or 585, 18ct or 750, 22ct or 916
Chinese, Korean, Middle Eastern and Indian jewellery can also use symbols as well as numbers, the majority of Mid Eastern and Indian jewellery tends to be 21k 22k.
Once you’ve separated the items into groups by their purity, weigh it. You will usually need an electronic scale that is accurate at least to .1g, or one-tenth of a gram. After weighing the items out in grams, check the Internet or the newspaper for the current gold price, which is usually given in terms of American dollars per troy ounce. As there are 31.1 grams in a troy ounce, you will need to divide the newspaper price by 31.1 in order to get the price per gram. Once you have used the above method to calculate the price per gram, simply multiply that price by the number of grams of gold in each karat category, and multiply the resulting number by the fineness of the gold to account for the differences in the purity of gold in each karat category.
Use the following rough guide to find the percentage by which to multiply each karat category:
10kt = 10/24 purity, so multiply the grams of 10kt gold by 10/24, or 41.67% purity;
12kt = 12/24 purity, so multiply the grams of 12kt gold by 12/24, or 50% purity;
18kt = 18/24 purity, so multiply the grams of 18kt gold by 18/24, or 75% purity;
…and so on.
Keep in mind, however, that it is very difficult to find a buyer who will pay you the full amount of what you have calculated your gold to be worth, since the buyer will have to deal with additional processing fees on top of whatever he pays you. The smartest thing to do is to find a large online dealer
Of course, if you are a wholesale seller and dealing with large amounts of gold, you need not worry – you will definitely find agents that are willing to buy gold at maybe 80% of the cost you’ve calculated; but for the average end-user of gold, who is trying to liquidate a small amount of gold coins or other jewelry gold, you will find that gold silver scrap buyers will usually only pay about 60-80% of the actual calculated worth of your gold items.
There are several reasons for this, such as that the buyer usually has to pay processing fees to melt the items down and reclaim the gold, as well as that the buyer is shouldering all the risk associated with buying a commodity whose prices have a volatile history, and might go down at any moment.