What You Need to Know About Under-Karating in Gold and Silver

It seems like more and more people are buying scrap gold and silver leading to scrap buyers paying a higher percentage as the competition increases. This is great for the person selling the item and I think it is good because I have always taught my students to pay a fair price. It is the only way you get referrals and repeat business.

What I want to discuss is what the actual purity of the scrap gold and silver is that you have bought. Most of you know that 10K gold is suppose to be 41.6% gold, 14K is suppose to be 58.3% gold, 18K is suppose to be 75% gold, but this just isn’t true. When you send your gold off to a refiner you will find that is comes back 2-3% lower than it should. I have ask numerous refiners and they all say the same thing that a 50-100 ozt batch of 14K scrap gold refines out between 55-56% of gold, not 58.3% like it is suppose to be. The same is true for 10k, 18K, and Sterling silver jewelry. On average you can estimate that the gold you are buying contains 2-3% less gold than it should have. In fact, all of the batches of gold I have sent off have been 2-3% under karated and I even had one batch that contained eight percent less gold that was expected.

Sterling silver jewelry can be up to 10% or more off and this is usually seen in Sterling jewelry from Mexico. But as I have found many other jewelry manufacturers are 2-10% off. I believe this is one of the reasons why most pawn shops/jewelers/coin shops pay less for silver than they do for gold. It is also because refiners do not pay as high of percentage for silver as they do for gold.

Why does this matter? Some of you are buying gold and silver at 30, 40, 50 cents on the dollar and could care less if its two percent off. As time goes on and consumers become more aware of the value of their precious metals they will demand more for the gold/silver. I often times work with my own “dealers” and I am working on a four percent profit margin. For me it is extremely important to be very accurate when buying from these select people as one small mistake could cause me to lose a significant amount of money. Whether you are just learning to buy scrap gold or are an experienced buyer; it is important to know as much about your industry as possible and this is just one more piece of knowledge that will help you be more successful.

Source by Matt Wallace

What You Need to Know About Under-Karating in Gold and Silver