Tip #2: Know Your Mass

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In our last tip, we said “Know Your Value“. To do that more effectively, and to approximate the market value of your gold, you need to know the mass of gold you have.

That might sound silly “I can put it on a scale,” and you should remember that weight and mass are no the same thing. More importantly, unless you have gold bullion (24K / 99.99% Fine Gold) your jeweller probably added elements such as silver, copper, nickel, and other metals to work with the gold (and to pay less for the final creation). That’s okay because these metals give jewelry strength and a pleasing tone. Pure gold is very soft and very “gold”.

There are three steps to Know Your Mass:

First, how are you measuring it?

You need to know what kind of scale you are using so that you can accurately price out however much old you have. The standard measurement for jewelry is the Troy ounce (ozt for short), or  roughly 31.1 grams. By comparison, the imperial ounce (what you see day-to-day), is 28 grams. Here’s where it gets fun: each Troy Ounce is broken into twenty pennyweights (dwt for short).

Second, how fine is your gold?

Once you know the mass of your gold, all you need to do is factor in the fineness (purity) of the gold. On a 24-part scale, the purity is referred to as the Karat. Pure gold, or gold of 99.99% fineness is therefore 24 Karat gold. Depending on its country of origin gold jewellery will typically varies from roughly 9 Karat to 22 Karat. In other words, 37.50% to 91.67% gold. In Toronto, most of the jewellery you will find is either 14 Karat, or 18 Karat. In other words, 58.33% and 75.00%.

To determine the value of your gold, you need to separate it by purity. The easiest way is by Karat. Once you’ve done that, multiply the percentage of gold by the mass of that percentage, and multiply that by the spot price per unit, e.g. spot price per gram (remember you can convert this).

Example: You go to your Toronto Gold Buyer with 10 grams of 14 Karat Gold, and 5 grams of 18 Karat Gold = [10 x (14/24) + 5 x (18/24)] x Spot Price per Unit. If Spot Price = $1,200 USD per Troy Ounce = (1,200/31.1) = 38.5852 per gram, then you get {[10 x (14/24) + 5 x (18/24)] x 38.5852} = [(5.83 + 3.75) x 38.5852] = USD 369.64. You then convert it to CAD at the rate of, for example, 1 USD = 1.35 CAD. So 369.64 * 1.35 = CAD 499.01.

This is your theoretical market value. Remember, your buyer still needs to make a profit, cover the costs of running their business, and the risk that there may be losses or impurities undetected. A 20% discount for theoretical market value would not be unreasonable, for example, $499.01 x 0.80 = $399.21.

Third, how honest is your gold buyer?

With that in mind, do not be alarmed if your gold buyer measures out the weight of stones (you can always request to keep them). This common practise is part of the world you enter to know your mass. The value of removed small stones is often negligible. Furthermore, their quality is very hard to determine. Thus, they tend to be of no second-hand value to the buyer.

Another point is that you should not be surprised if many pieces of jewellery contain slightly less than the designated purity of gold. There are several ways to test for purity of gold such as the acid test, the mass spectrometer, and the fire assay. These are ordered in increasing accuracy, complexity, and cost. We will discuss these more in future tips.

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