There’s no doubting the fact that the best way to buy gold well below spot price is through scrap gold buying. But, before you set out to master this technique there are some things you’ll need to learn.
GRADES OF GOLD
The first is the different grades of gold. Gold is graded in what is called the “karat system.”
In the karat system, pure gold is expressed as “24 karats” (24k). The gold content of any item depends on the proportion of gold it contains.
The most popular jewelry grades in the United States are as follows:
- 18k = 18/24ths or 75% gold. Also indicated as .750
- 14k = 14/24ths or 58.5% gold. Also indicated as .585
- 10k = 10/24ths or 41.67% gold. Also indicated as .417
In the United States, as well as any civilized country in the world, legal regulations require that the gold content of a piece of jewelry be marked on it. This law was initiated to protect the public against fraud.
If, for example, the jewelry item is stamped 14k it can not be less than 58% gold or the maker could be charged for fraud or counterfeiting.
Although this particular law has been in effect for many years, the United States Congress most recently passed an amendment in 1976 that stipulates the gold content of an article must be at least 10 karats for it to be called “karat gold.”
The karat stamp can be found on the inside of gold rings, on the clasp of gold
chains and bracelets, on the back of pendants and on earring posts. If there is no stamp present the item may still be gold, sometimes through wear the stamp is hard to see or is completely gone. In most cases you will need a 30x Loupe to be able to see the stamp. It can be purchased from any Jewelers supply store or through this site. (see sidebar)
But be aware, there are counterfeiters of gold, just as there are of money, even though it is illegal.
The usual type of jewelry that is copied are heavy necklaces or rings, were they use silver that is heavily plated with gold. And yes, they put a karat stamp on them!
Although it is rare that you will look at fake items, it’s good to keep your guard up and be ready if and when they do appear.
Early on, you may want to make it a rule to do gold testing on every item you look at. Eventually you’ll be able to tell the fake from the real just by looking at it.
