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How to Price Scrap Metal: Gold

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With the price of gold soaring, many companies are looking for ways to get their hands on your unwanted gold. Most companies ask you to send your scrap gold pieces to them for analysis. Once they determine a value, you are then sent payment. But before you mail away your gold, you may want to determine for yourself what the melt value - the market value of the gold contained within the piece - should be.

Determining the value of your gold piece:

There are a few simple steps one can follow in order to calculate the melt value of a gold piece:

1. First you must establish the quality of your gold piece. This is normally recorded directly on the piece by a stamp indicating the karat value of the gold (e.g. 10k, 14k or 22k). Gold purity is traditionally indicated in karats, which measures the gold purity on a scale of 1 to 24. In order to determine a percentage purity, you must divide this number by 24 (so 12k would be 0.5, or 50% pure, and 24k would be 1.0, or 100% pure). The piece may also be stamped with a number, such as "375", meaning 37.5% gold content (or 9k).

2. Second, use a scale to determine the weight of your piece using grams (note: 1 ounce is equal to 28.35 grams).

3. Look-up the current gold price and calculate the price per gram. Gold prices are usually quoted per troy ounce. One troy ounce is equal to 31.1 grams, so you can easily divide the current gold price by 31.1 to get the price per gram. (Click here to see spot prices at the New York Mercantile Exchange).

4. Finally, calculate the melt value of your piece by simply multiplying these three factors: (a) the weight of your piece, measured in grams (b) the purity of your piece, measured using percent, and (c) the per gram price of gold.

For example, a 10 gram piece that is 12 karats (12k), assuming a gold price of $1200 per ounce:

(a) weight of the piece = 10g

(b) 12k (12/24) = 0.5 (50%)

(c) $1200/31.1 = $38.585

10 x 0.5 x 38.585 = 192.925

The calculation provides us with a melt value of $192.92 for this piece (at the gold price of $1200/oz).

Let's do another example:

A 22 gram piece that is 14 karats (14k), with a gold price of $1600 per ounce.

(a) weight of the piece = 22g

(b) 14k (14/24) = 0.583 (58.3%)

(c) $1600/31.1 = $51.447

22 x 0.583 x $51.447 = $659.859

The calculation provides us with a melt value of $659.86 for this piece (at the gold price of $1600/oz).

What is your gold piece worth?

Remember that mail-in cash for gold companies only pay you a fraction of the melt value (that's how they make their profit). So it may be worthwhile to take your unwanted gold jewelry to local jewelry buyers and pawn shops to see if you can get a better price, or list it on-line for the price you feel comfortable with. As with most things, those who take the time to shop around will usually get the best price.

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