Understanding the exchange rate can keep you from getting ripped off

Selling Gold

by Bruce Roemer

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The most coveted element on earth is gold. Nations, including our own, once measured their wealth by it. Gold gave strength to the American dollar, which was historically "As good as gold."

In 1971, you could buy a new Ford Mustang for $2,900 or 71 ounces of gold. In 2011, you could buy a Mustang (basic) for $21,000 or 15 ounces of gold. You could buy four Mustangs today with 71 ounces of gold and still put $14,000 change in your pocket.

Most people selling gold today have owned their gold over five to ten years. In 2006, gold averaged $600 per ounce and 2001 averaged $271 per ounce for pure or 24kt gold.

It is sad to me that people are selling gold that they enjoyed in more prosperous times to keep the electricity on or buy food. What is even sadder is that most people are sold short in the transaction. I know because I sold my wedding band to buy Christmas presents for my children in 2009.

I was in the gold and diamond business since 1975. In 2005, the diamond side of my business hit the rocks in Africa, and by 2009, I had lost everything I had of monetary value.

I was out of the loop and went to local buyers to sell my wedding ring. The average offer was 20 to 30 cents on the dollar per pure gold value.

Luckily I knew better and called on some old contacts. Instead of getting $53 to $80, I got $269. Gold is money. But, like visiting another country, we must know the exchange rate.

First, let us take a look at what a karat (kt) of gold means. Gold is expressed as karat or kt and measures the purity of the gold used. For comparison, diamonds are measured in carat or ct. In diamonds, ct measures weight.

24kt is pure gold. 18kt is 18 parts gold to 6 parts other or 75% gold (i.e. 18/24=75%). 14kt gold is 14 parts gold to 10 parts other or 58% gold (i.e. 14/24=58%). 10kt gold is 10 parts gold to 14 parts other or 42% gold (i.e. 10/24=42%).

The other components or metals commonly used in these alloys or blends are copper, silver, tin, zinc, silicon, nickel, palladium, etc. Different metals cause gold to be different colors and hardness.

For example, there is no such thing as white gold in nature. 5+% palladium or nickel will cause yellow gold to turn white. High copper concentrate causes gold to be pinkish and so on.

Let us now consider weights and measures. Gold is traded in troy ounces. There are 20 pennyweights (DWT) to a troy ounce. There are 31.1 grams to a troy ounce. If today's gold market is $1385 per ounce for 24 kt, the value per pennyweight is $69.25 (or 1385/20 =$69.25). The value per gram is $44.53 (1385/31.1 = $44.53).

Remember that your jewelry is normally an alloy and is not pure gold. So, let's work on that.

14kt is 58% pure gold. If you have one pennyweight (DWT) of 14kt you have .58 DWT of pure gold. If you have 5 DWT (1/4 oz) of 14kt you have 2.9 DWT of pure or 24kt. 5x.58 = 2.92.

Remember one DWT of 24k at $1385 gold is $69.25. Multiply 2.916 x 69.25 gives you the value of the pure gold in 5 DWT. 2.916 x 69.25=$201.95.

Probably the easiest way to calculate value when selling gold is to use a chart where I have done the calculations for you.

Gold Spot







$1100 oz

Per Gram












$1150 oz

Per Gram












$1200 oz

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$1250 oz

Per Gram












$1300 oz

Per Gram












$1350 oz

Per Gram












$1400 oz

Per Gram












$1450 oz

Per Gram












$1500 oz

Per Gram












$1600 oz

Per Gram












Selling gold or trading gold is not a guess. It shouldn't be "give me your gold and I will tell you what it is worth." Your gold has a real and set value just like those bills in your pocket. The dealers have to make money so you can't get 100%, but you should at least get 50% to 70%.

Bruce Roemer has been dealing in gold since 1975.

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