The "TRUE" value of scrap Gold & Silver : eBay Guides

THE TRUE VALUE OF GOLD & SILVER

$17.80 or $15.97 per gram (for this example)

Everyone seems to feel that the value of their golden item is the karat weight (% gold) x the weight of the item x the world price for gold. But is it really?

an example a 14 kt gold chain weighing 10 grams and for easy figuring we are going to say the world price for gold is 950.00 per troy ounce. To determine the amount of gold in something that is expressed in karats.  Divide the number by 24, in this case 14 divided by 24 and you get 0.583 percent gold.

The world price of gold is ALWAYS expressed in troy ounces.  There are 31.10346 grams in a troy ounce.  With gold at 950.00 per ounce a gram of gold would be worth 30.54 per gram (950.00 divided by 31.10346).

So lets work it out

0.583 (% gold) x 10 grams x 30.54 (value of gold per gram) = $178.05 or  $17.805 per gram

BUT IS IT, REALLY

To convert the gold into cash it has to be purified, in other words sent to a refinery and they have to make a living as well.  So, what does that take and cost/

Most refineries have a minunmum amount that they will process and it's a lot more that 10 grams.  For the instance we are going to use 1000 grams of 14kt gold at the same world price of 950.00.

The First charge from the refinery is the hold back the percentage they keep for cleaning up your gold.  A lot of refineries keep 7% for this service (remember they have to make money too).  They will determine the actual amount of gold sent to them by performing an assay.

583 grams of gold x 7% = 40.81 grams of gold  (the 7% hold back for cleaning your gold)

So lets give them their share

583 - 40.81 = 542.19 grams of gold (or is it).

But it is still gold not cash

Its value based on world price is $16, 558.48 (542.19 grams x $30.54 per gram)

Remember the assay

The second charge will be the assay, where they determine exactly how much gold you have sent them.  A lot of refineries charge 100.00 for this.

16,558.48 - 100.00 = $16, 458.48 or 539.915 grams of gold ($16, 458.48 divided by 30.54 the price per gram)  

This gives you a value of 539.915 grams x 30.54 (value of gold per gram) = $16, 458.48 based on world price

Even though the world price of gold is 950.00, the refinery actually has two other prices, one for buying and one for selling.  Both of these prices are based on the world price and can vary as much as 30.00 either way of the world price of gold.  So in this case the buying price is 920.00 per gram.

Now you need cash so you have decided to sell your gold 539.915 grams x $29.58 (920.00 divided by 31.10346 grams) = $15,970.69 CASH

So let review

You cleaned and sold 1000 grams of 14kt gold (0.583%) for $15,970.69.  or for $15.97 per gram (15,970.69 divided by 1000 grams)

So which is the true value of gold $17.80 or $15.97 per gram.  In the end it is really up to you and what you plan to do with it.

All of this applies to Silver as well, except the percentages for the refinery are even higher.