How Gold Refining Companies Base The Value of Your Gold

Since the global economic recovery has been moving at a plodding pace, people have started to lose faith in the stability of the American dollar and the Euro. Should they still be considered as valid forms of currency? We’re all aware of how printing an excess amount of money when it’s not in high demand can result in inflation and debase the value of our currency system, so it’s no surprise that foreign governments and central banks around the world have started to purchase and stockpile gold.

All this increased attention on gold makes it the perfect time to cash in on its popularity, and get the most money out of your karat gold scrap. Whether you’re looking for a return on some old jewelry or used gold fillings, gold refining companies can provide you with an accurate quote for your scrap. Gold refineries typically service pawn shops, dental offices, or individuals for their various needs. They typically liquidate gold and silver, removing impurities (other metals) so it can be reused and alloyed with other metals or sold as pure gold.

In the past, gold was used as an acceptable form of currency, and has never failed to be seen as a hot commodity because of its rarity and demand. Now, given the economic recession, it has also been speculated that gold might even serve as a currency replacement. While they are both valuable, only gold has an intrinsic or tangible value that is not dependent on any one country’s economic policies.

Paper currency and gold are both recyclable and re-usable forms of currency, but only gold can boast that it’s also non-perishable. It can be melted down without losing its value, making it incredibly versatile and long lasting.

But before we get into how we can determine the value of your gold, let’s dispel some common myths about gold:

Myths About Gold

What is a Karat?

A lot of people mistakenly think the karat of an object is directly related to its size, but in fact, karat is just another word for purity (Carat is the term reserved for gemstones or diamonds). For example, an 18 karat wedding ring typically contains 75% gold. The rest will be composed of other metals. For a point of comparison, a single karat only contains about 4% gold. The higher the karat, the more expensive and valuable it is. In the States, 10 karat jewelry is considered the minimum standard for purity, while 24 karat is recognized as pure gold.

Does Pure Gold Jewelry Exist?

High-end jewelry stores like to advertise how they have high quality stock and usually boast about having a wide array of pure gold jewelry, but this term is a misnomer. Pure gold (100% gold) is actually extremely soft, making it unsuitable for jewelry making since it bends and warps way too easily. Gold jewelry needs the support of other metals like silver or zinc to make it more durable and avoid nicks and dents from appearing on eye-catching accessories.

Are Karat Stamps Accurate?

If a metal has a high purity percentage, it’s more valuable. But can we determine karat size just by looking at it? Sometimes we get lucky and our purchases actually come with stamps which indicate how many karats are present, but are these stamps accurate?

While your jewelry might indicate its worth (on rings it’s typically found on the inside of the band), karat stamps are not always accurate. Just because your jewelry says it’s worth 24K, it’s also possible that it’s worth a lot less. This is because the accuracy of stamps varies by country. Even places like the United States don’t police jewelry manufacturers who overestimate the worth of their inventory to turn a profit and trick the public.

How Gold Refining Companies Base the Value of Your Gold

Weight of Your Items

The first step in figuring out the value of your gold is to weigh the lot (the materials that you want to refine), which can include a mixture of metals along with combustible material like paper and cardboard. During the smelting process, the lot will experience a “melt loss”, since some metals like zinc and copper oxidize during the heating process.

Amount of Pure Metals Recovered

After all of the impurities have been removed during the smelting process, the amount of pure metals recovered (karat size) determines the value of your gold. You might find a small or large disparity between the “before melt weight” and the “after melt weight”. It depends on how “pure” your lot was to begin with.

Some refineries use cutting edge technology like the XRF assay, which examines the purity of gold within seconds. You’ll be able to see a detailed assay report that tells you the percentage of gold, silver, and various other metals found in your lot. X-ray fluorescence has a very low margin of error (around 0.01%), so you can be sure that you are getting an accurate estimate.

Market Price of Gold, Silver, or Platinum

The last factor that determines how well you will be compensated for your gold is the current market price of gold (or silver or platinum). Currently, the market price for gold is sky high, but if you want to get a better idea of what kind of returns you will be getting, you can always visit Kitco, a website that tracks the current value of gold around the clock and on an international scale.

Things to Consider

Possibility of Debasement

Just like paper currency, gold can also be easily debased (remember: karat stamps are not always accurate), so don’t be disappointed if your lot doesn’t warrant the large sum that you were hoping for.

Services and Benefits of a Refinery

Keep in mind that depending on the gold refinery, you will be charged a different rate and given different services and benefits. So make sure that the refinery you are dealing with offers insurance (in case something gets lost during the shipping process). To avoid getting scammed, check to see if the refinery allows you to set up an appointment and witness the melt and assay process first hand.

It’s important to do your research, since some gold refining companies might pay a lot more for gold dentals, while another pays more for solid kart or sterling. In such an economically unstable time, selling and investing in gold is a great way to ensure that you turn a profit and have assets you can use in the future. If you are thinking of selling your gold or would like to learn more about the refining process, check out Barrie Gold Buyers refining services