Calculating the Value of Scrap Gold

If you have scrap gold at home and decided to sell it, you might want to do your own estimations first. Don’t immediately go to pawnbrokers or stalls that say “we buy gold” without first doing your own weighing.

Knowing how much your scrap gold is currently valued will enable you to get a fair price since most dealers like to make their calculations underhandedly. Remember, scrap gold has a very different price than good-delivery gold — the ones that professional bullion traders use — which reduces the risk of fraud.

First step: determine your gold by the gram

First, you will need to have a jeweler’s scale (they only cost around $20). This is the best way to have an accurate reading for your scrap gold since they’re much more accurate than the gram scales people use in the kitchen. Knowing the weight of your scrap gold will help give you an idea of its base value, but take note that this doesn’t necessarily represent that actual price you’ll get. Use your measurement as reference when starting to discuss prices with pawnbrokers or dealers.

Second step: Know the current price of spot gold

All you need is to go to a financial site that has an updated price chart of precious metals, or tune in to a business channel on the TV to know how much an ounce of gold is. The price of gold fluctuates very often so make sure to calculate your scraps on the day that you decide to sell them. It’s highly possible that today’s spot price of gold will be much lower or higher tomorrow depending on the economic factors that affect it.

Third step: Gram conversion, fineness, and estimating your scrap gold’s worth

Gold is usually presented in ounce so if you need to convert them to grams, it’s 1 ounce = 31.1 grams. To get today’s gold price per gram, divide the spot price of gold by 31.1. For example, if today’s spot price is $1,200, gold’s price per gram would be $38.6 ($1,200/31.1)

But that’s not the end of it. You will also need to take into consideration the fineness of your scrap gold by dividing the karat by 24, then multiplying the result by gold per gram. So for example, you have a 22k gold and today’s spot price of gold is $1,200 per ounce. You already know that a spot price with that value will yield $38.6 per gram. To calculate the price of your spot gold, your formula should be like this.

22/24 = .9167

.9167 x $38.6 = $35.4

Remember that these are just for estimation purposes. Since your scrap gold will be assayed to determine the true percentage of your gold, your estimated price would possibly go lower. When gold is melted, it will lose some of its weight due to the metals that were used in the casting process.

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