Gold as a commodity is liquid, valuable, and reliable. It’s a good hedge against inflation and a lifesaver if you run into an emergency and need to pay a bill. If you have gold, you can sell it online and get the money you need to pay off any bills, pay for a trip, or take care of another pending obligation.
If you want to sell your gold, you need to understand how an appraiser assesses the value of gold. What do buyers do when calculating the worth of a gold bar or a gold coin. How do they appraise gold jewelry? All these questions may leave you wondering what you might expect.
Before you ask that a gold buyer send you an appraisal kit, it helps to know how an appraiser typically determines the worth of the metal.
In this case, they will look at several factors – all of which will help them determine a fair and equitable price. The following criteria are used when evaluating gold bullion, coins, or jewelry.
1. Checking the Current Market Rate
When an appraisal is made, the appraiser considers the current market rate for gold. This is necessary as the market rate is constantly changing. The rate for gold is assessed per troy ounce. This amount equals 31.1 grams. To figure out the current price per gram, an appraiser divides the troy ounce price by 31.1.
2. Estimating the Karat Value for Jewelry
If the appraiser assesses a gold piece of jewelry, they will take the karat number, such as 24. and multiply it by the per gram gold price. That calculation gives them the cost per gram for a specific karat number. Therefore, the karat number may be 10, 14, 18, 22, or 24. A jeweler’s scale is used as well to decide.
3. Reviewing the Values of Coins Online
An appraiser may also review the value of similar coins online if they are appraising gold coins. This, at least, gives them a quick overview of a coins’ worth.
4. Checking the Red Book or Blue Book Value of Coins
An appraiser may also check the red book or blue book values for coins. While blue book values cover the wholesale price of gold coins, red book pricing reveals the values for historic and rare coinage.
5. The Consumer Demand for Gold
The price of gold is also determined by the economic climate or gold’s current demand. If the demand is high, it will cause gold prices to increase accordingly. Therefore, you will get more money for your gold if consumer demand is high.
6. The Cost of Mining Gold
Gold is also sold at a higher price if the cost of mining the metal rises. Therefore, this added expense influences what you may receive for gold bullion or coins.
7. The Prime Interest Rate
The value of gold also has an inverse relationship with the interest rate set by the banks. If the interest rate is lower, people generally hold onto their gold. However, if the interest rate rises, gold is often sold to take advantage of the higher rate. This also impacts the amount you will receive for your gold assets.
Go Over the Factors Used for Buying Gold
No gold appraisal is set in stone. You have to have your gold appraised to see its worth based on the current market price. To ensure you get the best price, consider all the factors that affect the pricing.