Pure gold is a soft, malleable metal. To make gold jewellery, coins, etc. pure gold is usually mixed with other metals like zinc, copper, silver, or platinum. This mixture allows the gold to hold the desired shape even in the face of great force. At times, your jewellery may be deemed ‘scrap gold’ even if it is in excellent form. What is scrap gold? How do you calculate the value of scrap gold?
What is scrap gold?
Scrap gold is an item that is no longer in its original or marketed form. For example, broken jewellery or bent coils are often considered scrap gold. It is also worth noting that the term ‘scrap gold’ is also used to define the by-products of industrial processes.
The reason these are all deemed under one umbrella is simple: since this gold is not 100% pure, and to bring it to this state, excessive purification is required, it is called scrap gold. Scrap gold is rarely used by jewellers or goldsmiths. Instead, it is sent to refineries where it is melted and recycled.
Who buys scrap gold?
Many jewellers like, “Cash your gold” readily buy scrap gold. You can sell scrap gold to online buyers or pawn shops. However, the process followed in selling gold to each of these buyers varies.
What is the price of scrap gold?
The price of scrap gold varies from item to item. However, the price of scrap gold is calculated based on several factors. These are:
1. Weight
The weight of the item is first measured to determine the quantity of gold present in it. Smaller gold items are usually priced low. However, if you sell scrap gold in bulk, you are likely to get a better price response. It is also easier to negotiate the value of bulk items rather than each item.
2. Purity
The purity of the gold is the major deciding factor. Since gold items can have one or more metals mixed in them, the purity of each item in a set can vary. If the scrap gold has lower purity i.e. lower amount of pure gold, then the price of the item will be reduced.
Similarly, if the item has a mixture of two or more metals (other than gold), it will require more processing to separate the metals and purify the gold. Therefore, you may receive a lower price for your item.
3. Market Value
The market value of each metal fluctuates on a day-to-day basis. Even though the difference may not be more than USD 0.10, it makes a significant difference to the total amount. The industrial requirement of the metal also changes the market value. This, in turn, will affect the price given to you by the buyer.
4. Location
Location is one of the most important factors if you want to sell your scrap gold offline. In an online marketplace, buyers from anywhere in the world can offer to buy your scrap gold. However, when you visit a local shop, the local requirement in refineries and the jewellery industry heavily influences the value of gold.
These are the four factors that influence the value of your scrap gold. Let’s understand which methods are used to calculate the value of your gold.
Which methods are used to calculate the value of scrap gold?
Internationally, two methods have been used to calculate the value of scrap gold. Since the economy shifts quickly and changes how gold is valued, these methods are used as standards. Various vendors or countries stick to a single system and therefore, it is important to understand each.
1. The Troy Ounces System
Troy Ounces method can be traced back to the Middle Ages where one Troy ounce equals to 31.1 grams. This is a slightly outdated method and is not preferred because of the confusion it creates while calculating amounts.
2. The Karat System
The percentage of pure gold is measured in “karats”. If the gold jewellery contains 1/24 parts pure gold, it is called “one karat gold”. Most gold objects include a sign or indication that will inform you how much % of pure gold is in the item. However, if you’re unable to distinguish a mark on the surface, it might be a good idea to bring the item to a jeweller to get it valued.
Out of the two systems, the Karat System is often preferred by jewellers and scrap gold dealers. It is universally used to calculate the value of gold. Now that you’ve understood the basics of valuing scrap gold, you can get a fair deal for your scrap gold.
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