If one is in possession of items of broken jewellery, old tarnished gold coins or other forms of undesirable gold, one option is to sell such items as scrap gold. However, before making a commitment to sell to gold refiners or others in the market it is important to determine the fair value of scrap gold prices first.
Selling Gold: What is Scrap Gold?
Scrap gold is simply any form of gold which is bought by gold refiners or others who are solely interested in the commodity value of the gold, as opposed to taking any interest in value added forms of gold such as gold jewellery or antique gold coins.
As such, for those are buying gold the condition or form gold to be bought is of no consequence, the only concern for gold refiners and others buying scrap gold is the total weight of gold to be purchased for processing. This presents a significant opportunity for those who wish to sell low grade gold, as the individual is able to sell undesirable items such as broken jewellery or badly worn items of gold.
Gold Trading: Fair Scrap Gold Prices
Given that it has already been established that those buying scrap gold have no interest in gold beyond its commodity value, the fair price of the gold is effectively a multiplication of the current spot rate of gold against the total weight of gold to be sold. Whilst the current spot price of gold is constantly changing, a value can easily be obtained from the financial section of a newspaper or from online sources such as Reuters. Prices are usually quoted in the local currency with the price representing the market value of one troy ounce.
Whilst the fair valuation of scrap gold is a relatively simple formula to calculate, one should consider that the weight to be used in the multiplication should be that of the gold content, not that of the items containing gold. For example if an item weighs two ounces and the gold has a 12 carat purity (50% gold), then in effect the weight of the gold to be sold is one troy ounce rather than two. Hence in this case, the fair value would be demined by taking the spot rate of gold and multiplying this figure by one, not two.
In summary, if looking to sell gold then one should aim to achieve a price per troy ounce which is as close to the spot rate as quoted on the local exchange as possible. The seller should however, take into account the fact that the buyer of the gold will need to make a profit and a small amount of discount should be allowed for this. In addition, selling at scrap gold prices one should not expect to receive any premium for additional enhancements of the commodity such as those associated with the craftsmanship of gold jewellery or the collectability of gold coins.
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Frank Smith - Frank Smith currently works as an full time industry analyst for a well known construction company in Lincolnshire. In his spare time, ...
