by Barry Briskman

Created on: September 03, 2010

How Internet Gold Buyers Determine the Value of a Seller’s Property

Many people appear to be confused about how Internet buyers of precious metals determine the current value of the gold, platinum and silver items they receive from sellers. Sellers need to understand what seems to be a complex subject.

Despite all that has been written about this subject, many sellers still don’t seem to understand just how much actual gold their jewelry contains and how Internet buyers determine what precious metal property is actually worth. 

There are two primary factors that buyers use. The first is what an ounce of gold is worth at any given time and the second is just how much pure gold, platinum or Sterling silver a jewelry item contains. Here’s what a buyer actually does:

The Value of Gold 

Gold is a commodity traded globally and the price at any given time varies with supply and demand. Generally, when the demand exceeds the available supply, the price rises; when the supply exceeds the demand, the spot market price 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. These factors are too complex for discussion here. Currently, gold is valued at high spot market 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 by many financial experts.

Gold Purity  

When an Internet buyer 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. Buyers only pay for the precious metal content because the other alloys in the settings 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 $1,237/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

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