3 Steps to Determine the Value of Gold Scrap
by kencun on 10/02/10 at 7:50 am
The business of buying and selling scrap gold is thriving more than ever. However, if you are in this business or are planning to get into it, it is extremely important that you are knowledgeable on how to value you scrap gold. Being informed on how to calculate scrap gold value will give you more confidence in dealing with individuals or companies. Although you can always make use of a scrap gold calculator online, it would be a lot better if you have a good understanding of how they calculate the value of scrap gold to begin with so that you would be able to set scrap gold prices which will be profitable yet reasonable. To help you with this, here are some of the steps that you can follow.
1. Classify by karat fineness.
Scrap gold pieces have different karat fineness. Some of them can be 10 karat while others can be 14 karat. In order to know the value of the gold scrap pieces you have, you need to classify them based on their fineness. Generally, they will have their karat fineness inscribed on them. If you are having a hard time reading them, you can use a magnifying glass. If some of your pieces do not have their fineness inscribed on them, you can have some scrap gold buyers or an experienced dealer to have a look at them and test them. Keep in mind, though, that testing can result to some gold loss.
2. Determine the weight of your scrap gold pieces.
To know the correct gold scrap price of the pieces you have, you will also need to get their weight in grams. If you are using a scale which only displays ounces, then you can just convert the figure into grams through multiplying it by 28.25. For instance, if you have a 5-ounce piece, it would be 141.25 grams. Make sure that you get the combined weight of your gold scrap pieces while they are classified by their karat fineness. In short, get the total weight of all of your 10 karat pieces, the total weight of your 14 karat pieces and so on.
3. Calculate the total value.
This will be the last step for you to get the value of your gold scrap pieces before putting them into the market for individuals who buy scrap gold. However, this step involves four other steps. The first will be determining the market gold price. This is typically listed in US dollars per troy ounce. A troy ounce would be equal to 31.1 grams. To convert the market gold price into grams, you can simply divide it by 31.1. For instance the market price is at $810 for a troy ounce, the price per gram will be $810 divided by 31.1 or $26 per gram.
You then need to identify the multipliers for each karat fineness. This is because the market price is for 24 karat pure gold. To get the multiplier, you just divide the karat fineness by 24. For your 10 karat gold scrap pieces, it will be .4167 or 10 divided by 24. For your 14 karat gold scrap pieces, it will be .5733 or 14 divided by 24. For your 18 karat gold scrap pieces, it will be .7500 or 18 divided by 24.
Next, you will need to multiply the market price per gram by the appropriate multiplier. Using the $810 per troy ounce market price example, a 14 karat piece will have a value of $15 per gram or $26 times 0.5733.
Lastly, you will need to multiply the total weight of each group of gold scrap pieces classified by their karat fineness by the appropriate value per gram.
This process will never change, aside from the market value of the gold. Through following these steps, you should have an easier time getting the correct value of your scrap gold before putting it out in the market.
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