If you recently discovered the great profits that you can make when it comes to buying scrap gold and selling it then you must certainly be very interested in the things you should consider before buying it. The fact is that you will need to understand many factors in regards to this, factors that relate to the purity and complexity of scrap gold and the fluctuation of market rates. Not only that, but you will also need to learn how to judge the quality of the material and then sell the gold to sellers who are honest and fair.
In almost every case you will find that gold is going to be paired with another alloy. Amongst the 14 and 18 karat gold, you will also be able to buy 24 karat gold, which means there are no other metals present in this type of gold meaning it has the highest purity. If the gold has a lower number of karats, then it means it has been mixed with other metals and its price is going to be directly based on the level of its purity. So if you're planning on buying 12 karat gold, you will have to pay much less for it than what you'd need to pay if interested in 24 karat gold.
At this point you will need to weigh the amount of gold you're interested in buying. You will then need to have the karat number of your scrap gold divided by twenty four and then have it multiplied by the current price of gold. You should know that gold prices will fluctuate everywhere in the world and it's usually based on a per troy oz price. A single troy ounce is thirty one point one grams and if you have twenty one grams of 18k gold, for instance and the market price of gold is 1000 dollars per ounce, you would have to do the following calculations:
18k divided by 24k=0.75
1000 dollars per oz divided by 31.1g = $32.15 per gram
0.75 multiplied with $32.15 equals 24.11 dollars per gram.
You will of course want to make a profit out of the gold you are buying and that is why you should take between ten to twenty percent markdown off the going market price. The markdown will be influenced by the karat of the gold and you should know that it's actually more expensive to extract lower karat gold than higher karat gold. Even though it sounds a little bit upside down of what you thought, you should eventually charge your clients more when you want to sell them lower karat gold.
Buy Low and Sell High
In regards to your profits, you should know that they will also get to be influenced by the price the gold has on the particular day you decide to sell it. For instance, if you purchased it with 1000 per oz and would like to sell it when the price is 700 per oz, you will lose money. However if you anticipate the trends of the gold market, you will certainly be able to buy scrap gold and not be at loss.