Is this gold calculation right?

[phxAZ]

I'm hoping someone will validate or clear my assumptions up here...

Occassionally I come across gold jewlery for sale that is, well hokey, so the resale value in the fashion aspect isn't great, but I am wondering is the purchase would be worth it based on selling the raw material.

I read Midwest Refinery (I think is the name) pays 94% of spot. From what I understand, spot is the "quoted" price it is listed at one the stock/securties tickers. Today, for example, the quote for gold was $646/troy ounce. I am also to assume that is for 24kt gold.

So.... if I have an opportunity to buy a 14kt gold ring that weighs 5 grams... I would find out the raw gold market value with the following calulation?

14kt/24kt = 0.583 (14k ratio to pure gold)
5gr * .583 = 2.92 grams (adjusted weight in pure gold)
$646 / 31.1 (grams per troy ounce) = $20.84/gram (the spot value of a gram of 24kt gold)
Total spot value of ring = $60.85 (2.92gr * $20.84)
At 94% the price I would get from the refinery is: $57.20

Does this sound right or I am incorrect in some of my understandings here?

Thanks!

 

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[Ant]

You’re right on your conversion as long as MWR isn't expressing their prices in troy.


The Quotes below are from the GoldKit site:

"In the United States the purity of gold is designated by karat. Pure gold is 24k, but, because of its softness, it is not suitable for making jewelry. Other metals such as copper, silver, nickel, and zinc are added to gold to strengthen it. What is added and how much is added determine the color and karat of the gold.

To make this easier to understand let's take an imaginary ring and examine it. The color of the metal is immediately apparent. Gold comes in several colors, but let's pretend that this ring is pink gold. Inside the ring is stamped 10k. What do these things tell us? First, that the gold was mixed with copper, silver and zinc to make yellow gold. The pink look was achieved by using a larger quantity of copper. The 10k mark assures that 41.67% of the metal is pure gold, and the other 58.33% is copper, silver and zinc. It also indicates that the piece was made in the United States. (other countries do not use 10k). A 14k stamping would mean that the ring contained 58.33% gold and 41.67% other metals. If the ring was marked 18k, it would contain 75% pure gold and 25% other metals.

In Europe gold is stamped according to its fineness. Pure gold is 1000 fine; 18k gold is 75% or 750 fine. Consequently, an 18k ring made in Europe would be stamped 750. Below is a chart of the most common karat markings."

• US / Karats % of Gold Fineness
• 24k 100% 1000
• 22k 90% 900
• 18k 75% 750
• 15k 62.5% 625
• 14k 58.33% 583
• 10k 41.67% 417
• 9k 37.50% 375