Gold Prices (Part 1) – Understanding The Value of Gold

Gold Prices (Part 1) – Understanding The Value of Gold

Gold Prices – Understanding The Value of Gold
Now that you know how to set your business up, it’s time to learn gold prices and the
value of gold. Right now, I’m going to give you a basic overview,
and then I’ll go into greater detail later in this module. Let’s begin by looking at how gold is priced. Pricing Gold
Gold prices are based on the troy ounce. A troy ounce of gold contains 31.1 grams,
while a standard ounce contains 28.3 grams. Thus a troy ounce is slightly heavier than
a standard ounce is. The going rate for a troy ounce of gold is
referred to as the spot price. The spot price refers to the price that gold
can be bought and sold for at a specific time. Spot prices are a lot like the stock market. They can change throughout the day. However, gold is relatively stable, so the
changes aren’t usually really big. When someone brings you gold, you will have
to determine the karat content and the weight of the gold to actually find out
how much gold you have. Once you do
that, you can determine the spot price for the amount of gold that you have. With that in mind, let’s take a look at karats. Then, I’ll go over weighing the gold. Karats
Karats refer to the purity of gold. Twenty-four karat gold is pure gold. Pure gold is
malleable, which means it’s easy to bend. Because it’s so soft, it usually isn’t used
by itself. Instead, jewelers usually mix gold with other
metals. Then, they look at the
ratio between the gold and other metals to determine its karat value. You will need to determine the gold’s karat
value in order to know how much gold the item contains. Determining the Karat Value
There are a couple of things you will do to determine the karat value. First, you will
use your jeweler’s loupe to look for karat markings. Most jewelers stamp the karat
value on the jewelry Looking at a marking is just a starting point,
though. There are counterfeit items
out there, so you will also have to run some tests. You can run an acid test or use
your thermo-electronic device to test for the purity of gold. The test will show you what the karat of the
gold is. Then, you’ll need to determine
what percentage of gold you have. Karats and Gold Percentages
As I mentioned earlier, 24 karat gold is pure gold. That means if you have
something that is 24 karat gold, it is 100% gold. There aren’t any other materials in
the item. If you have gold with a lower karat content,
you will need to divide it by 24. For
example, if you have 12 karat gold, you will divide 12 by 24. That will tell you that
you have 50% pure gold. If you have 10 karat gold, you will divide
10 by 24. That would give you .4166 or
41.7% pure gold. You need to figure out the percentage of gold
the item contains after you test for karats. Then you will need to weight the gold. Weighing the Gold
Once you do the karat test, you will know how pure the gold is. However, you won’t
know how heavy the gold is, so you won’t know how much gold you have. With that in mind, you will need to use a
digital scale to weigh the gold. Once the
gold is weighed, you’ll do some math to determine how many grams of pure gold you
have. Then, you do some more math to find out how
much the value of gold is. I’ll
talk more about this later in this module.

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