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May 18, 2015

Cheating with Gold Math: The customer’s ring is worth $280 in real gold value. But you just offered $120, with a seemingly sound mathematical justification.


Let’s say you have a fourteen-karat gold ring that weighs fifteen grams, or about half an ounce, and gold is at one thousand dollars an ounce. First you weigh it and show the customer that it’s fifteen grams. Then you take the price of an ounce of gold and divide it by thirty-one to get a gram price for pure.
“Now we multiply that by fourteen for fourteen karat and divide it by twenty-four for twenty-four karat, which is what it would be if it were 100 percent gold,” you explain to the seller. “That gives us the price for your fourteen-karat gold. Multiply that by fifteen, for fifteen grams. Now, fourteen karat is 56 percent gold and 44 percent base metal, which burns off at the smelter, so we multiply that by 0.56. Finally, we deduct 10 percent for the smelter, and 15 percent for my profit. Most gold buyers will charge you 20 or 25 percent, which is a reasonable profit margin, but we do such high quantity of gold-buying here that we can afford very low margins. That gives us a final figure of…” We Buy Broken Gold | Lapham’s Quarterly

Posted by gerardvanderleun at May 18, 2015 1:02 PM. This is an entry on the sideblog of American Digest: Check it out.

Your Say

If you get yourself a crucible and a burner with a cradle to hold the cup you can melt down the gold yourself.

You will need tongs and gloves to grab the crucible and pour the gold into the mold. The impurities will settle out to the bottom as the metal cools and when you remove the gold from the mold, the impurities can be knocked off.

Is it worth doing? how much gold do you have?

Posted by: Vermont Woodchuck [TypeKey Profile Page] at May 18, 2015 3:39 PM

VW, I think you'd still have to have it rated. What purity, 10k, 14k, so forth.

Good point though, deal around the schmucks.

Posted by: chasmatic [TypeKey Profile Page] at May 20, 2015 12:07 AM

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