Gold Prices – Understanding The Value of Gold

Now that you know how to set your business up, it’s time to learn gold prices and the

value of gold. Right now, I’m going to give you a basic overview,

and then I’ll go into greater detail later in this module. Let’s begin by looking at how gold is priced. Pricing Gold

Gold prices are based on the troy ounce. A troy ounce of gold contains 31.1 grams,

while a standard ounce contains 28.3 grams. Thus a troy ounce is slightly heavier than

a standard ounce is. The going rate for a troy ounce of gold is

referred to as the spot price. The spot price refers to the price that gold

can be bought and sold for at a specific time. Spot prices are a lot like the stock market. They can change throughout the day. However, gold is relatively stable, so the

changes aren’t usually really big. When someone brings you gold, you will have

to determine the karat content and the weight of the gold to actually find out

how much gold you have. Once you do

that, you can determine the spot price for the amount of gold that you have. With that in mind, let’s take a look at karats. Then, I’ll go over weighing the gold. Karats

Karats refer to the purity of gold. Twenty-four karat gold is pure gold. Pure gold is

malleable, which means it’s easy to bend. Because it’s so soft, it usually isn’t used

by itself. Instead, jewelers usually mix gold with other

metals. Then, they look at the

ratio between the gold and other metals to determine its karat value. You will need to determine the gold’s karat

value in order to know how much gold the item contains. Determining the Karat Value

There are a couple of things you will do to determine the karat value. First, you will

use your jeweler’s loupe to look for karat markings. Most jewelers stamp the karat

value on the jewelry Looking at a marking is just a starting point,

though. There are counterfeit items

out there, so you will also have to run some tests. You can run an acid test or use

your thermo-electronic device to test for the purity of gold. The test will show you what the karat of the

gold is. Then, you’ll need to determine

what percentage of gold you have. Karats and Gold Percentages

As I mentioned earlier, 24 karat gold is pure gold. That means if you have

something that is 24 karat gold, it is 100% gold. There aren’t any other materials in

the item. If you have gold with a lower karat content,

you will need to divide it by 24. For

example, if you have 12 karat gold, you will divide 12 by 24. That will tell you that

you have 50% pure gold. If you have 10 karat gold, you will divide

10 by 24. That would give you .4166 or

41.7% pure gold. You need to figure out the percentage of gold

the item contains after you test for karats. Then you will need to weight the gold. Weighing the Gold

Once you do the karat test, you will know how pure the gold is. However, you won’t

know how heavy the gold is, so you won’t know how much gold you have. With that in mind, you will need to use a

digital scale to weigh the gold. Once the

gold is weighed, you’ll do some math to determine how many grams of pure gold you

have. Then, you do some more math to find out how

much the value of gold is. I’ll

talk more about this later in this module.