How Much Is Your Scrap Gold Worth?

You want to make as much money as possible from your scrap gold... and the gold buyer wants to make as much profit as possible as well -- by giving you as little cash as possible. It's to your advantage if you can calculate the value of any gold you've salvaged before trying to sell it.

Carats (Karats) Is The Measure Of Gold Purity

The purity of any gold, including the stuff you salvage is universally measured in carats.  Most people have heard the term, but never take the time to find out what it means.  As a gold recycler, you ARE teaching yourself though... so pat yourself on your money-making back!

24 Carats or karats (they both mean the same thing) is pure gold -- the kind you'll find in gold bars.  If you see it spelled 24 carrots, you might be in the grocery store instead of the jewelers. Because gold is so soft and malleable, the 24 karat stuff is rarely used to make jewelry and other items.  Typically, silver or copper are added to the gold to make it stronger and longer-lasting.

Since 24 carats is 100% gold, then 23 karats would be 23 parts gold to 1 part another metal.  12 carats would be 12 out of 24, meaning it's half gold and half some other metal.  Obviously, the higher the karats, the more valuable your scrap gold is worth.

Gold jewelry is often hallmarked or stamped.  You can easily find out the carat value by looking up the mark online, or using a Hallmark Reference Book if you're a serious gold recycler.

Weighing Salvaged Gold

Unless you stumbled on some 24-karat bars or a bowling ball sized gold nugget, the amounts you'll be weighing will be very small.  That kitchen or bathroom scale won't do the job.  You'll need to get yourself a very accurate digital scale.  You can't go wrong if you buy this digital scale -- it's a great price for a highly-rated and popular model.

Before weighing, you need to remove any non-gold items such as gems, clasps, etc.

Separate all your recovered gold by karat value... all the 18-carat gold in one pile, 24-carat in another, etc.  Don't weigh different values together.

Although you often hear the value of gold given in ounces (or troy ounces), most buyers default to the metric system and use grams since it allows for the smaller amounts they usually receive from salvagers and recyclers.

In case you want it for future reference, 1 Troy Ounce of gold is equal to 31.1 grams which is also eaqual to 20 pennyweight (an outdated measure you probably won't run into).  If you see a gold price per ounce, you can get the per gram value by dividing the dollar per ounce price by 31.1 grams.  For example, if 18k gold is selling for $800 an ounce, it's selling for 800/31.1 = $25.72 a gram.

Calculating The Value Of Scrap Gold

I'm going to use nice easy numbers to make things easier to follow.  The figures below are not meant to represent the current value of gold in any way whatsoever.

Let's say you have 25 grams of 18-carat gold, and you know a dealer is paying $20 a gram.  $25 multiplied by 20 grams gives you $500.  See?  Math CAN be fun!

But is that a FAIR price for your recovered gold?

Years ago it would have been tougher to find out how much you should earn from recycled gold.  Today, the Internet gives you access to all the information you need.

Most of the time you can find the current price for the karat of gold that you want to sell.  However, if you only have access to the local value of a Troy Ounce of pure gold (24k) here's how to do the "make cash with gold" math!

Again, I'm using made up numbers here.  Just plug the actual values into the equation when it's time to sell your gold.

Let's say an ounce of 24-carat gold is selling for $1244.

Divide by 31.1 to get the price per gram.  In this case it would be $40 per gram.  

Then multiply the weight of your recovered gold by the number of karats and then divide by 24.  Using our earlier example, (25 grams multiplied by 18 carats) divided by 24.  Or (25 x 18) / 24 = 450 / 24 = 18.75.  The final number (18.75) is how many grams of pure gold is contained in the scrap gold.

So now you just have to multiply the number of grams of pure gold you have, by the price per gram we figured out earlier.  18.75 x $40 = $750.

So do you put all your scrap gold in a bag, run to the dealer and demand $750?  Not quite.

Whoever gets your recovered scrap gold has to melt it down and refine it -- which costs money.  Realistically, you can expect to get anywhere between 80% and 90% of the actual market value of the gold.  In the above gold pricing example, that would be about $600 to $675.  

There are other factors as well that could affect the price you get for your gold.  If there's only one buyer in the area, he or she will be able to demand a lower price.  Even if you live in a big city with a lot of buyers competing against each other, there may also be a large supply of scrap gold being brought in, which can drive the price down.  The above explanation is just to help make sure you don't get robbed or scammed by unethical buyers.