The karat weight of gold can be confusing for someone who is not acquainted with selling scrap gold.
Most gold brokers are honest but you could run into an unscrupulous buyer that may try to tell you that the karat value stamped on your piece really doesn't mean much.
Don't fall for this! Karat values have great meaning in the scrap gold trade.
The purity of gold is measured in karats on a scale of one to 24.
You are not likely to find 24k gold but anything marked 24k means that the piece is 99.
9% pure gold.
Pure gold is too soft to work with so varying amounts of alloys are added to it to make it more malleable.
Lets take a look at an example of why the karat scale is so important if you decide to sell your scrap gold.
You have a junk gold chain that weighs 30 grams and the karat mark on the broken clasp is 18k.
You decide to sell it as scrap and take the chain to an antique dealer.
The old man looks at the chain with a loupe and tells you he's paying $12.
00/ pennyweight for scrap gold.
$12.
00 x 19.
35/pennyweights = $232.
00 - Not bad for a piece of junk.
He pulls out a wad of cash big enough to clog a toilet, peels off the bills, and everybody lives happily ever after.
But wait a minute! What just happened here? If the spot price of gold is $1000/troy ounce that means pure gold is worth $32.
00/gram retail.
You just sold 22.
5 grams of pure gold with a spot value of $720.
00 for $232.
00.
A difference of $488.
00.
No wonder the old man was smiling.
The point is unless you understand how gold is brokered at the wholesale level you are at a serious disadvantage if you decide to sell your scrap gold.
Don't be asleep if you decide to sell your scrap gold.
What you don't know can cost you dearly.