What Is Scrap Gold?
Scrap gold refers to unused or damaged gold items that you can resell to either earn money or contribute to recycling efforts. It includes any gold-containing item intended for reprocessing, such as jewelry, dental gold, gold coins, gold bars, and even electronic components containing gold.
How is it weighed and measured?
When buying and selling scrap gold, it is typically weighed in troy ounces. One troy ounce is equivalent to 31.1 grams, while one regular ounce is equal to 28.34 grams. Another unit of measure for scrap gold is pennyweight (dwt), with one pennyweight approximately equal to 1.555 grams or 0.05 troy ounces. Alternatively, 1 gram equals 0.64 pennyweights, 1 troy ounce equals 20 pennyweights, and 1 ounce is equal to 18.23 pennyweights.
The purity of scrap gold is an important characteristic. It indicates the percentage of gold in an item and the proportion of other metals present. Purity is measured in karats, with 24 karats representing pure gold. To convert karats to a percentage, divide the karat number by 24. For example, a 14-karat (or 14K) ring contains 58.3% pure gold (14 divided by 24).
What’s its value?
The value of scrap gold is determined by its weight and purity. By knowing the price of gold per unit of weight and the karat of a gold piece, you can estimate its value as scrap gold. For instance, if you have an 18K piece weighing 100 grams, the gold content is 75% (18K divided by 24), which is equivalent to 75 grams of pure gold. Multiply the pure gold weight (75 grams) by the current market price of gold per gram to obtain an estimate of the gold’s worth in your jewelry.
However, selling your scrap gold may not fetch the estimated value because gold brokers often purchase old gold at a discounted price, typically 20%-40% below the market price, to cover costs associated with melting, refining, and other operating expenses.
How can you sell it?
There are numerous dealers who specialize in buying scrap gold jewelry. However, it’s important to understand that they won’t offer you the full value of your jewelry as you would find in a retail store since scrap gold buyers primarily consider the intrinsic value of the metal rather than the design or aesthetic appeal.
When estimating the value of your pieces based on current market prices, it’s crucial to acknowledge that a buyer will likely pay you less than your estimate. Buyers aim to make a profit by reselling the gold, so they offer lower prices. It’s worth noting that different scrap gold buyers may provide varying prices for your jewelry based on their intended resale plans and target market. It’s advisable to research multiple options and evaluate several offers.
As a general guideline, most scrap gold buyers purchase gold at around 60% to 80% of the market price and the higher end of this range is typically offered to sellers with a substantial quantity of gold.
Negotiation is possible in some cases, as some buyers are open to it. However, it’s important to be realistic and set your upper limit accordingly because most gold dealers are unlikely to exceed 80% of the market price. That doesn’t mean that there aren’t buyers who may offer more, but they are usually large operations that often own metal refineries as well.
Want to start your jewelry business? We can help! Contact Us