Today, let’s try and answer some questions about gold. What is gold and what is your scrap gold jewellery worth?
Gold is a chemical element with the symbol Au and has atomic number 79. Gold is bright, slightly reddish-yellows, dense, soft, malleable, and ductile. Its malleability is such that one ounce of gold can be hammered out into a sheet one metre square. And it’s ductility allows one ounce of gold to be drawn out into a thin wire up to 80 kilometres long and only five microns thick. This makes it ideal for the tech sector which needs a non-corrosive, super-thin material for its products. Those are some of gold’s physical characteristics.
But let’s bring this closer to home. For most of us, our only exposure to gold is in some of the jewellery we own. Wedding bands, neck chains, bracelets, earrings, etc. are often made of gold. And what are those numbers which salespeople throw at us? 10 karat, 14 karat, and 18 karat are numbers we’ll often hear in a jewellery store. Simply, those numbers represent the purity of gold, as opposed to “carat” - a term used to represent the weight of a diamond. Pure or fine gold is referred to as 24 karat. Therefore, 18 karat, as a fraction of 24 karat, would represent a gold purity of 75%. And 14 karat would be 58.5% pure, etc.
What does all this mean for anyone wishing to cash out their scrap gold, i.e., single earrings, broken chains, worn out rings, and so on? When taking your scrap jewellery into your favourite jeweller or scrap gold dealer, the process usually entails the following:
- Determine gold purity, usually through acid testing or gold stamping (which is not always accurate).
- Weigh the jewellery, in grams.
- Determine the gold bullion value for the day.
How To Figure Out Value
For example, let's assume you have 10 grams of 14 karat gold and let’s assume CDN $1600.00 per Troy ounce of pure (24kt) gold (one Troy ounce equals 31.1 grams). We now have sufficient information to determine the cash bullion price of your scrap gold. Simply take the weight, 10 grams, divide it by 31.1, multiply it by the gold purity, 58.5% (14kt), and then multiply by the gold bullion price $1600/oz. The answer: 10 divided by 31.1, then multiplied by 0.585, and multiplied again by 1600=$300.95. The cash value of our hypothetical example is CDN $300.95. Expect the dealer to charge a fee or commission for their service.
You would be correct in assuming that the retail price of your jewellery is much higher than the scrap value. But think for a moment about the scrap value of your car vs its showroom sticker price. A dramatic difference! The ratio on scrap jewellery vs its retail price is not as bad as on cars, but the principle is similar. By going back to scrap value, you eliminate all the inherent costs of production, distribution, marketing, etc. However, I recall, many years ago, when gold bullion was pegged at $35/oz. Today it’s over $1600/oz. so, your gold scrap value has had a nice appreciation in the past 60 years.
I hope this clarifies some questions you may have harboured about the value of your scrap gold. Keep in mind that certain types of jewellery, such as vintage pieces, luxury brands, designer pieces, etc. may carry values greater than scrap.
