Its lustrous qualities, malleability and relative scarcity mean that gold continues to be an incredibly sought-after product. That’s why, when you need some quick cash, selling gold is always a great option. But it’s important not to confuse the perceived or emotive value of gold jewellery with the actual monetary value. To ensure you get the best price for your gold jewellery, we’ll outline just how buyers determine its value.
How is gold value assessed?
Yes, your gold ring might be more than a century old with an interesting back story that involves wars, sword fights and shipwrecks, but that doesn’t mean it will fetch a high price. To find out what your gold jewellery is truly worth, here’s what you need to know.
1. The gold carat
The carat is a measure of the purity of gold – pure gold is 24 carats. The purer the gold, the higher the value. Each item of gold is assigned a carat number and this will assist in determining whether your items are, in fact, real gold, and what the gold purity is. If you want to determine the carat, you can check the number on the piece of jewellery. However, if the number has been worn away over time, there are other ways to find out the carat. The most direct is to go to a jeweller who can give you the carat. Alternatively, there are two tests that can be done.
Acid test: You can buy a gold testing kit which includes a bottle of nitric acid and a test stone. You simply rub the gold against the test stone, and put a drop of acid on the stone to test the carat. The acids are available in the various carats – 10, 14, 18 and 22. If there is no change in the stone’s colour, that is the carat you’re testing. If it turns brown, then the gold is lower than the carat being tested. If the acid disappears, the item isn’t real gold.
Skey test: Another DIY gold testing kit is the Skey test. You place the gold jewellery on the testing plate and touch it with the probing pen. This gives you an instant reading of the gold carat.
Please note: If the gold jewellery was made prior to 1980, there’s a chance it isn’t the carat marked on the jewellery as the laws pertaining to gold purity weren’t as accurate.
2. The spot price of gold
Because gold is a commodity, the price actually changes from day to day. The most current price of gold is referred to as the ‘spot price’ and is measured per troy ounce of gold (31.1 grams). Where the demand for gold increases, the spot price will be higher. However, if the demand drops, you’re not likely to get the best price for the gold jewellery.
3. Ease of extraction
The other factor that will impact the gold value is how easy it is to actually extract the gold from the jewellery piece. This is because it’s unlikely that the item will be sold as is, the buyer is more likely to re-fashion it into something new. The tougher it is to extract gold from the jewellery, the more labour costs will be involved, and the lower the value of your piece.
The gold price equation
For those of you who are quite mathematically minded, you can actually determine the value of your gold jewellery by using this equation.
Step 1: Check the spot price of gold online to get the current price per gram (divide the price by 31.1).
Step 2: Divide the carat number by 24 and multiply this number by the price of gold per gram (step 1). This gives you the cost of gold per gram for that carat.
Step 3: Weigh your gold using a food scale. Multiply the weight in grams with the cost per gram for its carat.
What about gold coins?
Remember that gold coins and gold jewellery are not valued in the same way, so you will need to factor in other elements for gold coins. The numismatic value is determined by elements such as the coin’s physical condition, age and rarity. To determine the value of your gold coin, you can:
Compare: Check online for similar coins to get a rough estimate.
Appraise: Meet with a coin dealer for a more accurate appraisal.
Check: Look the blue book and red book for pricing guides on coins. Blue is for wholesale prices; red is for rarer and historic coins.
Where do you sell your gold jewellery?
Once you’ve got a better idea of the value of your gold jewellery, you are ready to make a sale. While pawn shops and certain jewellers are an option, the best way to sell your gold jewellery for the best price is to a reputable online buyer. Divorce Your Jewels is an accredited member of the Jewellery Council of South Africa, is registered with the NCR (National Credit Regulator) and has experienced gold buying specialists on staff. Contact them today for an accurate quote!
Read More: What Should I Expect When Selling Gold?