Gold is so high, why do I get so little money for it?
Let’s dive into something that often baffles many – why the scrap value of your gold jewelry often seems much lower than what you expect, even when the spot price of gold is soaring.
Grab a cup of coffee, and let’s chat about this golden mystery!
Understanding Spot Price vs. Scrap Value
First off, let’s get on the same page about the spot price. The spot price of gold is essentially the current market price for Pure gold, which is often quoted per ounce.
This is the price you hear about on financial news and is influenced by various factors like economic conditions, geopolitical events, and overall demand.
Now, when you bring your gold jewelry in for a liquidation appraisal or sale, the value you get is the scrap value, which is typically lower than the spot price.
Why?
Well, let’s explore!
Gold Fineness and Its Impact
Gold fineness is a measure of gold purity, expressed in karats.
Now, when we talk about gold jewelry, we’re rarely dealing with pure gold which is 24K or 999.9% pure.
Most gold jewelry is made from gold alloys, which mix gold with other metals like copper or silver to make the pieces more durable.
Most jewelry is stamped with the gold fineness, for example, if a jewelry piece is stamped 18-karat, the gold content is 75% pure, meaning it’s 18 parts gold and 6 parts other metals.
Here are the different gold stampings you can expect to see on your jewelry:
- 24 Karat (24K): Pure gold, rarely used for jewelry.
- 18 Karat (18K): 75% gold, common for high-end jewelry.
- 14 Karat (14K): 58.5% gold, popular for everyday wear.
- 10 Karat (10K): 41.7% gold, more durable and affordable.
- 9 Karat (9K): 37.5% gold, usually made in Europe, especially Ireland
The gold fineness in your jewelry directly affects its scrap value.
When you sell your gold, you’re essentially selling the gold content, not the craftsmanship or sentimental value.
So, if you have a 14K gold ring, you’re only getting paid for the 58.5% of gold it contains, not the full weight of the piece.
Factors Affecting Scrap Value
Beyond gold fineness, several other factors influence the scrap value:
- Refining Costs: The process of extracting pure gold from your jewelry involves costs that the buyer must consider. This includes melting, assaying, and refining, which reduces the amount they can pay you.
- Market Demand: The demand for gold among refiners and investors can also impact the price you’re offered. If there’s low demand, buyers might offer less.
- Middlemen and Dealers: Many gold buyers are middlemen who need to make a profit. This means they will offer less than the spot price to cover their costs and margin.
Making the Most of Your Gold
Understanding these nuances helps set realistic expectations when selling gold. Most stores will separate your gold jewelry by fineness (14K, 18K, etc), then put each pile on the scale. The gold jewelry is usually measured in pennyweights (dwt) or grams (gm).
You can either look for conversion on google or I use this easy scrap calculator by Kitco.
It’s always a good idea to shop around and get multiple quotes to ensure you’re getting the best deal possible.
Knowledge is power, and now you’re equipped to navigate the gold-selling process with confidence!
Happy treasure hunting, and may your gold adventures be both lucrative and enlightening!
I hope this clears up some of the mystery surrounding gold prices and helps you make more informed decisions with your jewelry.
Need more assistance? I am happy to answer any questions you may have regarding your jewelry.
Need an expert jewelry appraisal? For a Professional Appraisal with me, Jennifer Vichinsky, GIA Graduate Gemologist, click the button below to schedule your appraisal appointment.
Appraisals are done in person at my comfortable home gemological lab right in front of you, while you watch and wait. Feel free to ask any questions before, during or after; I love to educate!
You will leave with a colored print-out in a protective plastic sleeve so that your appraisal stays as secure as your jewelry. I also send you a pdf version to easily email to your insurance provider.
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