Cash for Gold Co Tells Sellers How They Determine Gold Value

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Los Angeles, CA, August 3, 2010 — Cash for Gold Co, one of the leading Internet buyers of precious metals, receives many inquiries about how they determine the current value of the gold, platinum and silver items received from sellers. Apparently sellers need to understand what seems to be a confusing subject to many, so this answer bears repeating once more.

According to Joe Montes, president, “Notwithstanding all that’s been written on this subject, many sellers still don’t seem to understand just how much actual gold their jewelry contains and how Cash for Gold Co determines what its worth at the time of receipt.

“There are two major factors that we use. The first is what an ounce of gold is worth at any given time and the second is just how much pure gold does any jewelry item contain.

The Value of Gold

Gold is a commodity traded globally and the price at any given time is a matter of supply and demand. In general, when the demand exceeds the available supply, the price rises; when the supply exceeds the demand, it falls. Supply and demand are, in turn, affected by many external factors including the value of the U.S. dollar; the price of oil, inflation, etc.; factors that are too complex for discussion here. Currently, gold is valued at all-time record-high prices. And while the actual price varies over any given trading day, this price has remained high for many months now and is predicted to continue going up.

Gold Purity

When Cash for Gold Co receives a seller’s gold, platinum or Sterling silver items, they must be assayed to determine their purity. Most gold jewelry is marked with a symbol such as 24K, 18K, 14K or 10K. This indicates just what percentage of the total weight of a setting is gold. The rest is other alloys added to improve the hardness and durability of the jewelry over time. We only pay for the gold content because the alloys have little if any value. Here’s an important point: Precious metals are measured in Troy Ounces which is a bit more (1 Troy Ounce = 1.097 Avoirdupois Ounce) than the familiar ounces we use in everyday life. Therefore, if the current spot market price is $1,252/ounce, it is a Troy ounce. Also, while there are 16 ounces in each pound under the Avoirdupois system, a Troy pound contains just 12.

A Troy ounce is often broken down into Pennyweights expressed as (DWT). Here, 1 Troy ounce contains 20 DWT. That means, for example, that at $1,252/Ounce, each pennyweight is valued at 1/20th or $62.60. Thus, if a seller sends-in a heavy gold chain that contains 20 DWT of 24K gold (99.99% Gold) it would have a total current value of approximately $1,252.00.

One other factor comes into play during the assay process: The actual percent of pure gold content in a given piece. If a piece of gold jewelry is marked 18K it contains 75% gold; 14K contains 58.33% gold; 12K has 50% gold and 10K has 41.67% gold. Thus, if the gold chain mentioned in the paragraph before this one was marked 18K instead of 24K, it would be worth 25% less or $939.00. As the Karat number goes down, the amount of gold content goes down and the value drops correspondingly “.

Cash for Gold Co buys gold of any age, type or place of manufacture and also buys platinum and Sterling silver, which are valued through the same process. Sellers then receive the highest-possible percentage of the actual value of their property, which is 100% less a modest deduction for company overhead and a small profit.

Other press releases from Cash For Gold Co

• Selling Precious Metal Jewelry Will Be a Real Problem Solver When Extra Cash is Badly Needed - August 1st, 2011
• High Insurance Coverage for Property in Transit is Important - July 27th, 2011
• Learn to Tell if Your Jewelry is White Gold or Platinum - July 25th, 2011
• Protect Yourself When Selling Precious Metals to Internet Buyers - July 25th, 2011
• Cash For Gold Customers Ask: What is ‘Black Hills’ Gold and is It Valued Differently? - February 4th, 2011