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Formula for buying scrap gold


#1

I have had several people coming in to my shoppe wanting me to buy
their old gold jewelry.

I have bought a few pieces on what they said they wanted considering
what I had in my pocket at the moment. So far, I have come out ahead
comfortably. I know there must be a formula to work by instead of
the the approach I am using.

What formula do you use when you are approached like this?

Thanks for your input in advance.
Angela Hampton


#2

Basically I buy scrap metals for reuse rather than jewellery an an
object so I drop them on the scales and pay the current scrap value
or even a small percentage more depending on how usable the metal
is. I’m sure that this does not cause offence or argument because I
make it clear it is metal for reuse I am buying and not some heirloom
that has a intangible value to be applied. Most secondhand jewellery
dealers offer less than scrap anyway. What I dont use I send to the
refiners.

Nick Royall


#3

I think the question was what is the scrape value we all know the
24k oz price but what is the 18k 14k 10k so one value I was hoping
some would post are sponce to this myself.

jen lane


#4

18K is 18/24 fine gold (75%). 14K is 14/24 fine gold (58.3%). 10K is
10/24 fine gold (41.6%). Multiply the spot price by the percentage
and you have the spot price for the alloy. Divide by 31 to get grams,
by 20 to get dwt.


#5
I think the question was what is the scrape value we all know the
24k oz price but what is the 18k 14k 10k so one value I was hoping
some would post are sponce to this myself. 

It’s just a matter of simple math. (Karat / 24) * (24k price) *
(Metal Weight)

Say the 24k price is $1200 per ounce. You’ve got a customer wanting
to sell you.2 ounces of 14k gold.

So what you do is take 14, the karat, and divide it by 24. That
gives you the percentage of gold in the scrap, %58.3. Multiply the
price of gold (1200) by.583, that gives you the per ounce price of
14k gold, $699.60. Multiply that price times the weight of your metal
(.2), that gives you your final total (139.92).

One last step would be to take off the refiner’s percentage plus
your own percentage for the profit. Just to make up numbers, say the
refiner takes 20% and you want 10% for your trouble, so subtract that
30% (41.98) from the total. That gives your customer $97.94.

Willis


#6

What you ultimately pay for scrap is up to you. But you really need
to know what you can get for scrap from your refiner before you start
shelling out. The longer you hold scrap the more exposure you have to
a decrease in gold and therefor you might want to hedge your bets by
paying a little less over the counter. So some might pay higher and
send scrap to the refiner more frequently but any batch charges might
reduce your bottom line, long term if you do many batches

So how do you estimate what you will receive for any given karat? If
you use dwts, take the market price, multiply by.05(20 dwt to the
troy oz), multiple that by your karat numeral (14K=.585 theoretical),
multiply that by the percentage of return your particular refiner
pays (some pay 90%, some 95%, some more, depends on who and how much
weight in the batch), then deduct refining charges which are a batch
oriented thing. You’ll no doubt insure the shipment so figure that in
too.

so… say $1250 market and 14K scrap…

1250 x.05 = 62.50 per dwt for pure gold

62.50 x.585 = 36.56 per dwt for 14K scrap

36.56 x.95 = 34.73 per dwt 14K scrap paid to you before refining
charges

as I said refining charges can vary so get that info from your
particular refiner. If you send in $3000 worth at a clip a hundred
bucks or so become almost meaningless if you bought well. Send in
$500 worth and suddenly the charges become a significant percentage
taken out of your bottom line.

You can boil down that math to a simpler equation for each of the
major ka rats but I figured you might need to know all that goes into
it rather than take somebody’s final formula as gospel. The above
example becomes Market x.02778 = paid to you per dwt of 14K, then
minus charges. Adjust the formula for grams if that’s what you use.
Not everything stamped 14K is actually 58.5% gold.

As far as what to pay…You might elect to treat scrap like any
merchandise purchase that you might perhaps keystone. You might want
to pay more if you have competition. There’s no law, there’s no
overwhelming custom.

One thing to watch out for is the customer who pulls things out one
at a time to get individual prices for each piece, tells you the life
story of each one and you might go thru a dozen quotations and still
not bag the sale. Its easier to say, “well let’s see everything
you’re thinking of selling first”. Remember to deduct weight for
large or numerous stones, 1 dwt = apx 7.8ct. If you’re buying gold
then buy GOLD. Do not pay for inconsequential stones, do not pay for
design, do not pay for names. Buying gold and buying estate are two
very different things. Buy the gold, sell the gold, go out for
dinner.


#7
I think the question was what is the scrape value we all know the
24k oz price but what is the 18k 14k 10k so one value I was hoping
some would post are sponce to this myself. 

Formula for what the value of gold is, if the spot price is $1200,
divide by 24 (24kt), $50 (per karat) and multiply by the karat value
of the object, let’s say 14 kt., $700 for an ounce, then divide by
20 for dwt, $35 or 31.1 for gram price $22.51 and multiply that by
the weight of the piece. This formula gives you the spot price, what
you pay out for scrap depends on how much your refiner charges,
shipping charges, time you hold it in case the price drops.

Richard Hart G.G.
Denver, Co.


#8

Since 24K is 100% gold, to figure out the amount of gold in the
other karats, simply use a fraction with 24 at the bottom of the
fraction times the price of an ounce of gold.

For example, 18K would be (18/24) x (the price of an ounce of gold)
if gold is $1230 per ounce -

for 18K gold it would be (18/24) x 1230 = $922.50 per ounce of 18K
gold

for 14K gold it would be (14/24) x 1230 = $717.50 per once of 14K
gold

for 10K gold, it would be (10/24) x 1230 = $512.50 per once of 10K
gold

Jaynemarie


#9

If you call a place like 5 Star Refiners in NYC, their answering
machine will tell you the price for each (including platinum) per dwt
for that day (post 10:30 am when the price is updated).

However, generally, you take the troy ounce price divide it by 20
(for dwt) and then divide or multiply it based on the karat… so…
1240 an ounce/20 = $62 dwt for pure gold… then multiply it by the
percentage of gold in the karate you have.

10KT = 10/24 = .4167
14KT = 14/24 = .5833
18KT = 18/24 = .750

Then you’ll have the approximate value of the scrap… keeping in
mind that rarely will the final be the karat weight you think…
i.e., 14kt usually comes out in the 13+ karat range. If you are
taking it to a refiners, they will literally melt it and analyze the
final “nugget” to get the real karat. So, I round down in the
percentages to get a conservative calculation when I am dealing with
anything below 18kt.

Or at least, this is how I do it.

Cameron


#10
so... say $1250 market and 14K scrap... 
1250 x.05 = 62.50 per dwt for pure gold 
62.50 x.585 = 36.56 per dwt for 14K scrap 
36.56 x.95 = 34.73 per dwt 14K scrap paid to you before refining
charges 

Interesting formula. The one I learned at G.I.A. was $1250 divided by
24, $52.08 times karat of item, if 14kt, gives 729.17 per ounce of
14kt. divide by 20 for dwt gives $36.46.

1 divided by 24 is.0416, $1250 times.0416 is $52. I am not good at
math, but it seems that your formula is off by $10.

Highest payout I have found is by NTR Metals, 98% with no assay fee.
There is one in Denver, Co., I can wait 20-40 minutes and get paid
for gold or silver. There are over 30 offices worldwide.

Richard Hart G.G.
Denver, Co. 80210


#11

what happened to 585 for 14kt ? was it always .583 or were all that
jewelry marked 585 wrong ?


#12

The above formulas work well to find the value of the gold. However
you can’t give the customer the ending amount of money or you’ll
loose money on every purchase.

When you send the scrap to the refiner, there’s also a refining
charge you’ll be charged as well as the postage/shipping & any other
overhead. Also the spot price may have dropped the day the scrap gets
to the refiner.

Even if you melt the scrap & use it yourself, there is extra time
involved that needs to be payed for.

Dave


#13

When we give scrap to the bullion dealers, 18ct gets us twice the
amount that 9ct does. My understanding is that you get paid for the
gold content, not the silver, copper…etc that the metal is alloyed
with.

If you know what they are offering for a gram of 24ct gold, simply
divide the weight of gold you have by 24, and then multiply it by 9,
14, 18 or 22, depending on the carat of the gold you have. You can
use similar calculation when alloying a gold up or down.

Jamie
http://primitive.ganoksin.com


#14
Highest payout I have found is by NTR Metals, 98% with no assay
fee There is one in Denver, Co., I can wait 20-40 minutes and get
paid for gold or silver. There are over 30 offices worldwide. 

P.S., 98% payout is for gold. silver is about $1.00 an ounce less
than spot.

Richard Hart G.G.
Denver, Co. 80210


#15

if you’re looking to know how much to pay, go to

click on scrap calculator and type in today’s spot price. that’s
what YOU’LL get from that refiner.

Give your customer 50-65% of that.

David

David Geller
www.JewelerProfit.com


#16

Jen,

I think the question was what is the scrape value we all know the
24k oz price but what is the 18k 14k 10k so one value I was hoping
some would post are sponce to this myself. 

Sorry to be abrupt and harsh but if you can’t crunch the numbers you
have no business buying gold. New or scrap. Jewellery 101 type
exercise.

jeffD
Demand Designs
Analog/Digital Modelling & Goldsmithing
http://www.gmavt.net/~jdemand


#17

One thing that I haven’t seen mentioned in buying gold (and this is
a little off point) is that you must account for “dirt”. When you buy
jewelry “off the street” it contains anywhere from 1 to 4 % dirt make
up of body oils, tanning lotion, hand cream, hair spray, etc. This
dirt gets burned off in the refining process and can cause a lower
than expected return…Teddy


#18
what happened to 585 for 14kt ? was it always.583 or were all that
jewelry marked 585 wrong ? 

14kt divided by 24kt =.58333. I always alloy using.585 which is
called over karating. What I have understood is that over karating
makes sure that after manufacturing the result including soldering
will be plumb 14kt.

Richard Hart G.G.
Denver, Co. 80210


#19
1 divided by 24 is.0416, $1250 times .0416 is $52. I am not good
at math, but it seems that your formula is off by $10.

The $62.50 i arrived at expresses the value of 1 dwt of 24K (so I
would be multiplying by 20 to get back to market 62.5 x 20= 1250)
the $52.08 figure you mention represents the value of 1 oz of 1K gold
(so you’d multiply by 24 to get back to market 52.08 x 24= 1249.92)
Those are not the same thing although the math works in both cases.

We are taking different paths around the same mountain. You go west
and then north and east, I go east and then north and west. We meet
on the other side for lunch. Bottom line is we are only ten cents
different at the theoretical value of 14K scrap before charges. I
can’t account for the ten cents, decimal places?


#20
However you can't give the customer the ending amount of money or
you'll loose money on every purchase. 

I’m mystified at the number of folks everywhere who confuse the
words “loose” with “lose”. I see it everywhere. How about this as a
memory aid: " if the stone is “loose” in the setting you might
"lose" it? Sorry, just a pet peeve of mine.

Jerry in Kodiak