Valuation – Purity & Weight Units – Gold, Platinum, Diamonds
How are Precious Metals Valuated?
The value of a precious metal item is based its purity and weight. To determine the value, All items are measured for precious metal content (purity) and weight. Based on this, the value of the items is determined.
Gold: The King of Metals
Gold is an easy to work with metal, with infinite uses, and always in great demand. Gold is liquid. There is always someone ready to buy it. That is why it is the king of metals.
Gold Content (Purity)
Gold content is traditionally measured in Karats. More precise, percentage of gold content, percentage based analysis can be done by electronic means. Unless they are assayed bullion, gold items are never pure. Gold is a very soft metal. In order for gold items it to be of practical use, gold needs to be alloyed with hardners. Alloys are also used to manipulate gold coloration (i.e. white gold). How much alloy is used to manufacture the gold item determines its purity.
Gold Purity Testing (Karating)
Gold testing can be done electronically and by gold testing chemical solution. Determining the gold purity of an item is called "Karating". Gold items typically are stamped for karat value. For instance, a 14 karat chain will have a "14K" stampled in the clasp, a 18 Karat ring will have "18K" stamped on the inside. An item that is stamped at higher karat value than what it tests for is "under karated".
Under karating is very common. Unless an item is severely under karated, the under karating is not considered fraud. However, if detected, it will affect the gold item’s valuation. This is because the karat value of a gold item is based on an "up to" rating. Not an specific content percentage. If a gold item tests as 10 karat but it is stamped 14K, that is a fraud.
The "karat" gold purity rating is ancient, and based on the weight of the carob seed. At that time the weight of the carob seed was the best bench mark available. Since there is variation within that, and a few other factors, that may be the reason there is so much gap between karat rating; 10K, 14K, 18K instead of 10K, 11K and so on.
Chemical gold testing is done applying testing solutions. The testing solution for which the item is karated for should not react when applied to the item.
Example: A 14K item will react to the 18K testing solution but not to the 14K testing solution. If it reacts to the 14K testing solution, it is under karated. If the item does not react to 10K testing solution, it means the item 10K rather than 14K
High tech, modern testing equipment is much more precise. However, this equipment, if not properly used, will not test correctly. High end electronic testers give gold content percentage and karat rating. Because of this, this equipment exposes under karating.
- Rule of Thumb Gold Identification
- Gold karat rating is typically stamped in the item. Look in clasp, inside ring, or similar place
- Stamp may be faded. Use a lupe
- If not stamped, most likely not gold
- EP means Electro Plated – Basically thin gold coated
- GF means Gold Filled – Basically thick coated
- Gold is not magnetic. If item reacts to magnet, it is not gold
Types of Impurities
Impurities are all the metal alloys mixed with gold in order to manufacture the gold item. These include:
- Hardeners – Used to make gold harder. Example: Dental gold
- Softeners - Used to make gold easier to work with – Example: Solder for connecting components
- Colorant – Used to manipulate coloration – Example: White gold
|Karat||Gold Content||Typical Use||Comment|
|8||Up to 33%||Souvenirs||Not too common|
|10||Up to 41%||Jewelry||Very common|
|14||Up to 58%||Jewelry||Most common|
|16||Up to 67%||Dental||Alloyed with hardeners|
|18||Up to 75%||Higher end jewelry||Common|
|22||Up to 92%||High end jewelry||Less common – Very soft|
Platinum is a much more rare and therefore more valuable metal. However, platinum is much harder metal to manipulate and has fewer applications. Although not as liquid as gold, because of its rarity, platinum is always in demand.
Platinum Purity Rating
Like gold, platinum, unless it is in assayed bullion form, it is rarely in pure form. Most platinum is alloyed with Iridium. Platinum is rated by percentage.
- 95% Platinum is 95% platinum 5% iridium (less common)
- 90% Platinum is 90% platinum 10% iridium (more common)
- Not magnetic
Since Platinum is much harder to work with, it is much easier to identily. Platinum items are stamped with marking ".95 Plat, .5 Ir". Since platinum is much harder than gold, stamps rarely fade. If the stamp of platinum jewelry item faded by contact with skin or clothing, there is something wrong with it. Platinum can be tested both chemically and electronically.
Silver is the most common of the precious metals. Silver infinete applications, from jewelry, to electronics, to photography to medical. Because of this, silver is extremely liquid. Silver coins have been traded almost since money was invented. There is always someoner ready to buy silver.
Silver Purity Rating
Like gold and platinum, unless it is in assayed bullion form, it is rarely in pure form. Silver is a very soft material. Because of this, silver jewelry and luxury items are mixed with hardeners. From the precious metals point of view, there is only one type of valuable silver items: "Sterling Silver"
- Sterling silver is 92.5% silver
- Sterling silver items are identifiable by the stampings "Sterling", ".925", "925" or similar
- If the itme is not stamped, most likely it is not silver
- Often, specially in jewelry, stamp is worn and faded. In that case, use a lupe
- Not magnetic
Weight Measurement Units
Presently most precious metal jewelry is weighted in grams (gr). Grams are used because it is a small enough unit to not require much decimals or the use of fractions. Pennyweight (dwt) is used less and less. In practical terms, specially with quality jewelry, very few items are heavier than a troy once (ozt). That is one of the reasons ounces are not used to measure the weight of precious metals and gems. A troy once (ozt) is different than an ounce (oz). This may easily lead to confusion. The dimensions of the object are not taken into consideration. All that matters is how much actual metal is on each piece.
Precious Metal Weight Conversion Table
- 1 Troy Ounce (ozt) = 31.104 Grams (gr) USE THIS FOR JEWELRY & Precious Metals
- 1 Ounce (oz) = 28.349 Grams (Do not use this for Jewelry & Precious Metals)
- 1 Pennyweight (dwt) = 1.555 Grams (gr) = 0.050 Ounce (ozt)
- 1 Gram (gr) = 0.643 Pennyweight (dwt) = 0.032 Ounce (ozt)
- 1 Ounce (ozt) = 20 Pennyweight (dwt) = 31.103 Grams (gr)
Precious metals and gems are measured using a professional grade, high sensitivity scale. If low value stones are attached to the item, an estimate of weight is subtracted. For example, class ring stones weigh between 1 and 2 grams depending on the size of the ring. In this case, the ring weight will be what the scale measures minus 2 grams.
For Precious Metals
| Karat (ct)
For Diamonds & Gems