• Electronic Testers
• “Scratch Test” aka “Acid Test”

 
But even before formal testing starts, any gold buyer will perform a simple visual examination under a 10x magnifying glass, known professionally as a “jewellers loupe” looking for a karat mark (10K, 14K etc) and a “maker’s mark” which is the registered trademark of the original manufacturer. Most experienced buyers recognize the more common maker’s mark and will often accept such pieces at face value: if it says 10K and the mark is from a known maker, most buyers will accept the piece as 10K.
 
But if the maker’s mark is not known, or if there is no karat mark or if the buyer just needs confirmation of the karat, some more formal test is required.
 
The oldest, and many professionals believe the best, of these tests is the acid or scratch test. There is an old saying in the precious metals business that “The acid doesn’t lie” because it is based on a precise chemical reaction used millions of times for centuries. The test is simple, and is based on the fact that gold has a high resistance to corrosion by any but the strongest of acids. The acid that will dissolve gold is a blend of nitric and hydrochloric acids in a ratio of 1:3 and is called Aqua Regia. Pure Aqua Regia will dissolve pure gold, which is of limited usefulness in testing karat golds and is nasty stuff to work with. But it is possible to make precise dilutions of the acid such that a 10K acid will dissolve anything less than 10K gold but will not dissolve 10K itself. Likewise a 14K acid will dissolve anything less than 14K but not 14K itself, and so on.
 
The tester makes a single “scratch” with each piece of jewellery to be tested, across a testing stone which is typically a flat piece of slate. The weakest of the acids is applied to the stripe on the stone. If the stripe dissolves, it is not even 10K gold, but if the stripe survives it is at least 10K. The tester then moves on to the 14K acid. If the stripe now dissolves, the item is at least 10K but less than 14K. An experienced tester can then use the speed at which the stripe dissolves to determine intermediate karats like 12K, but in North America 10K, 14K and 18K cover at least 80% of jewellery.
 
The other common testing method is the Electronic Tester.
 
This test uses a little machine and is based on the fact that gold is highly conductive of an electric current. The better the conductivity, the higher the karat, at least in theory. The test is also simple. The piece to be tested is clamped in a little alligator clip on the testing pad. The clip is attached to the testing unit by one of two wires. The other wire from the testing unit passes through a tube of electro-conductive gel, basically a mild acid. A current is set up through the piece of gold and the tester provides a digital readout. Here is where the “in theory” part comes in. The read out cannot be read directly as a karat of gold. Instead, the number provided by the readout needs to be matched to one of the columns on a little chart on the face of the tester, corresponding to the colour of gold. There is considerable overlap in the values on the chart. A reading that means 10K in one colour can mean 14K in another colour of gold. Also, contaminating factors such as a rhodium plating on the surface can produce wildly divergent readings. The electronic tester seems like a fool proof device that anyone can use, but in fact it requires an experienced operator to yield reliable results.

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But how about the other white metals? White gold vs Platinum?

For many years platinum in pure form was worth more than gold in pure form, by quite a bit. The Platinum/Gold ratio was always a number bigger than 1. The price difference was always in platinum’s favour.

But after the 2007 financial crisis a whole new set of factors entered the metals markets. Equities declined in value, currencies depreciated, banks became unstable. Investment money went looking for a “safe haven” and where a lot of it went was into gold, driving up the price.

Meanwhile manufacturing, particularly automobile manufacturing, declined badly. Since an awful lot of platinum is used to manufacture the catalytic converters in cars, the price of platinum declined. The Platinum/Gold ratio became inverted, to a number less than 1. The price comparison between gold and platinum came to favour gold, by quite a bit.

Today platinum has finally clawed its way back to be worth more than gold, although the ratio has narrowed so both metals are worth roughly the same amount in the $1700.00 per Troy ounce range

When it comes to valuing a piece of jewellery, a different factor enters the picture: karat

Virtually no jewellery is made with a pure metal. Gold, silver and platinum are all “diluted” with other metals to make alloys. Platinum jewellery is typically made with an alloy of 95% platinum, 5% copper. So the value per gram of platinum Jewellery is typically 95% of the value per gram of pure platinum

White gold jewellery, on the other hand, is typically 18 karat, which is an alloy containing 75% gold. The other metals in that alloy are a blend of copper, sometimes silver and typically about 2% nickel to give it the white colour. European jewellery often uses palladium in place of nickel for the white colour. So the value of 18 karat gold is 75% of the value of pure gold.

You can see, therefore, that platinum jewellery is still typically worth more than white gold jewellery, gram for gram, even if the price of pure platinum and pure gold are virtually identical, because the alloy used to make platinum jewellery is richer than the alloy used to make gold jewellery

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Factors affecting the price typically include the sentiments in the equities markets, confidence indicators such as unemployment and real estate statistics, and currency fluctuations

This was a week in which equities trumped all else. Gold as an investment has an inherent disadvantage: it pays no dividends or interest and actually costs money to hold since it needs to be physically stored somewhere.

Equity markets have risen for eight days straight, motivating investment money to flow out of gold into the stock markets. Curiously this flow was strong enough to overcome forces which normally drive the gold price higher: new home starts were down, unemployment claims remain high and the Euro strengthened against the USD. Since gold is price in USD it normally follows that a weak USD is bullish for gold, but not this week.

It seems unlikely that these counter-intuitive trends can hold for long. If the Euro continues strong vs the USD into next week, some upward movement in the gold price would seem reasonable to expect.

The post This Week in Gold: Jan 21-25 2013 appeared first on GoldSmart: Turning Old Gold into Smart Money.

• Gold Parties
• Estate Sales
• Individual Consultations

We hope you find our new site easier to navigate and more helpful as you decide where and how to sell your old gold.

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The second problem is that diamonds are the most profitable component of jewellery sold to the public. The difference between the wholesale value which dealers will pay for loose stones and the retail value charged for a diamond set in a finished piece of jewellery is greater than any other component.

The third problem is that grading of diamonds is a skilled and subjective process. One stone with few to no inclusions, well cut and a top colour may be worth $600.00 per karat at wholesale while a stone the same size but with several inclusions, a chip and yellow color may be worth virtually nothing

Our typical advice on diamonds is that they are invariably worth more to the current owner than they are to anyone else. Most sellers are best served to have the stone removed and reset into a new piece of jewellery.  We are generally able to perform this service on the spot at one of our parties and, unlike most jewellers, we do not charge for this service

If a seller does wish to sell their diamonds we use an electronic tester to confirm that the stone is a diamond. We then examine the stone under 10x loupe to assess the cut, clarity, color and to estimate the carat weight.  Carat in diamonds is in fact a measure of weight, not of size, so it is impossible to get an accurate carat weight of a set stone but we can, from experience, make a reasonable estimate of the weight

We then make an offer based on the wholesale value per carat for the type of stone we are buying. For larger stones we also offer a service in which we will actually “shop” the stone to several reputable wholesalers to obtain the best price for our customer.

The post What is a diamond worth? appeared first on GoldSmart: Turning Old Gold into Smart Money.

What does it mean?

Gold and platinum prices are driven by radically different fundamentals.  Gold is primarily an investment while platinum is primarily an industrial commodity.  Only about 10% of gold production is consumed by industry while almost all platinum goes into things like catalytic convertors for cars.

The gold price responds mostly to “fear factors” such as sovereign debt, inflation, increases in the money supply, deteriorating confidence in currencies such as the Euro.  The platinum price responds mostly to the industrial outlook, automobile production, chemical industry demand for catalysts.

In the current world scenario it isn’t hard to see why the PGR might drop below 1 and the prices become uncoupled.  In the past such anomalies have not lasted long.  Most technical analysts seem to feel the same rule will apply this time, but as long as the world struggles with debt and flat industrial demand it will be interesting to watch the PGR.

The post Platinum is worth less than gold? appeared first on GoldSmart: Turning Old Gold into Smart Money.

Here is the GoldSmart Code of Conduct:

1. We publish our prices on our web site and update them daily to reflect the London 2nd Fixing for gold and silver and the noon exchange rate for conversion of the US dollar to CDN.  Not only do we publish what we pay, we pay what we publish.  There is no fine print specifying “in office prices” or any other out-clause to our price list
2. In addition to looking for karat marks and maker’s trade marks with a 10 power jewellers loupe, we have available at least two testing techniques, chemical and electronic, to verify the karat of the customer’s jewellery.
3. We use accurate scales and we verify the scale in front of the customer using standard weights.  Our scales are calibrated in grams to at least 1/10 of a gram to ensure an accurate weight
4. We weigh and evaluate the customer’s jewellery in the customer’s presence.  There is no back room at a GoldSmart Gold Party.  The customer witnesses and participates in the entire evaluation process of their jewellery so they understand and agree with the evaluation before making a decision
5. We calculate the value of the customer’s jewellery on a form with the daily prices printed on it.  No GoldSmart consultant can use anything other than the pre-printed price sheet and settlement form to calculate the value of the customer’s jewellery
6. We explain in advance that coloured stones and diamonds can be removed and returned to the customer if they wish.  We do this at no charge and in the customer’s presence.
7. Sometimes an estimated value is required, if there is a large non-precious component such as a watch movement.  If the customer accepts the value, we remove the non-precious component and weigh the item again.  If the final weight results in a higher value, the customer gets the higher value.  If the final weight is lower than expected, the customer gets the original estimate.  The customer never gets a lower price than our original estimate.
8. We explain in advance that we buy precious metals to be melted and refined.  We make it clear that we are not jewellers.  There is no chance of their jewellery being resold, but there is equally no chance of them buying it back if they change their mind.  We always ask that the customer remove any item to which there is sentimental value or about which they are unsure.  If in any doubt, we refuse the customer’s items until they are certain they no longer want them.
9. We have vigorous Know Your Customer, Anti Money Laundering and Anti Crime protocols.  We obtain valid name, address and phone number from every customer.  We photograph every customer’s jewellery and catalogue the photographs by date

If your gold buyer doesn’t score 100% on each of these points, you need to reconsider.  A high price means nothing if the scales are inaccurate.  An accurate weight means nothing if 18 karat gold has been categorized as 14 karat.  The buyer needs to comply with the whole Code of Conduct and you need to be able to witness the whole process so you can see that you are getting a fair deal.

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Consumers have learned that it’s smart to convert old jewellery to cash and use it for something productive.  The challenge today is for consumers to choose a channel through which they will get best value, fair and accurate.  A key determining factor is obviously the offered price, but the price is not always what it seems.

You cannot really understand the price offered unless you also have some idea of the underlying markets used to determine the price.  At GoldSmart our price page also includes the latest markets, foreign exchange rates and a chart of the gold price for the last 30 days: Click Here to see what I mean.  Anyone with a calculator can understand exactly how our prices are determined.  We are completely transparent and consistent.

At GoldSmart we also constantly shop all the major, and not so major, gold buyers to see what they are up to.  A recent audit of the web sites of some companies in this business turned up the following interesting anomalies:

• A price chart dated April 11, even though the audit was conducted April 15.  The real price had risen substantially in those 4 days, but was not reflected in the buyer’s chart.  At GoldSmart our charts are updated every day, and we sometimes adjust prices intra-day if the market is very volatile.  You always get the most current price
• A price chart with fine print: “In office prices”.  This means that if you use any of this buyer’s other services: gold parties, fundraisers, community events, they will pay a lower price.  At GoldSmart our price is consistent to all sellers.  At a gold party, through a mail-in or at an agent: we always pay the same price
• A price chart in “dwt” unit of measure.  These are “pennyweights” which is a US unit of measure for precious metals.  You should immediately be suspicious if you see this.  A pennyweight is about 1.55 times the weight of a gram, so prices in pennyweights look high unless you read the fine print and realize you have to divide by 1.55 to get the real price per gram.
• A buyer promising to beat any competitor “by 20% of the price difference”.  A clever bit of mathematical sleight of hand.  If the offered price is $20.00 per gram and the competitor’s price is $21.00 the difference is $1.00.  20% of $1.00 is twenty cents! This offer makes it sound like this buyer will beat a competitor by 20% until you really think about what is being said.

As a consumer seeking to convert old gold to smart money, published prices are the first thing to look for.  Then you need to spend a few more moments to see if there are any “tricks” built in to the quoted prices.  Look for complete transparency, including the latest markets and exchange rates and charts of recent price changes so you can see exactly how the price was calculated and whether now is a good time to sell.

The highest price is nice, but only if it is real!

The post When is a price not a price? appeared first on GoldSmart: Turning Old Gold into Smart Money.

Many of us have pieces of jewellery that have been in the family for years or even generations.  We recognize them when we see them.  The pieces have lost their luster, have stones missing, have had repairs many times and are distorted out of shape.  It’s clear the piece was loved, worn and cherished.  In years of late, it has been banished to the bottom of a jewellery box, not seen the light of day for years and the “kids” seem to have no interest.  After all, wasn’t it owned by a Great Great Grandmother that they no longer remember, connect with or even share a culture with?  The battle in the mind was never clearer than at last night’s Gold Party and we have some advise for those of you unsure of what to do.

1. The bottom line is if you are not ready emotionally to part with it, don’t.  As we say, we can not uncook the egg and once the piece has been melted, it can not be retrieved.  You can always sell old gold at a future date.
2. Before you go to a Gold Party, do a little homework.  Perhaps you have several items from that Great Great Grandmother, some in better shape than others, divide and separate your pieces into categories and make a few selections of pieces that still carry meaning.
3. Fashion and style of today is very different.  One lady at the party last night said “I’d rather have the money to give to my kids so they can select something of their own that they wear with love, pride and remembrance of where it came from.”  I thought that was a fitting and interesting statement.  After all, loving, wearing and remembering is what is wished for in a piece of jewellery, not gathering dust at the bottom of a jewellery box.
4. What kind of “shape” is your piece in?  Does it have stones missing, is it broken or bent out of shape?  Let’s face it, some pieces of jewellery really have done their useful time.  Bring the piece to the Gold Party and ask if the remaining stones can be removed or if an interesting piece of detail can be cut away from the rest of the piece.  You can always have a new piece of jewellery made incorporating  bits from the old.  We are fortunate to have many talented jeweller’s and silversmiths ready to do some custom work for you.

We really want you to be happy with your decision.  No gold buyer should pressure you into letting go of something you are not ready to let go of.  We are happy to be an objective party, discuss each piece with you and give you options.  It’s what truly makes us different.

The post Letting go of sentimental items appeared first on GoldSmart: Turning Old Gold into Smart Money.

It’s much easier for anyone, even a gemologist, to certify the authenticity of a diamond if it is not mounted.  But most diamonds you might wonder about, at a used jewellery shop or flea market, are in a ring or other mount, so we will begin with some things you can look for in a mounted stone.  All of these work best with the aid of a ten power jewellers loupe (magnifying glass):

• Looking straight down through the top of the stone, the facets should not appear like “double vision” or duplicated.  If they do you are probably looking at a Moissanite (silicon carbide) which is a very good synthetic diamond that is hard for even gemologists to spot
• Still looking down through the top of the stone, rainbow coloured internal reflections may be pretty, but they are evidence of cubic zirconia or glass,  Diamonds tend to contain greyish internal reflections
• And, still looking straight down through the top surface, you should not be able to see the “point” at the bottom of the diamond.  If you can see the bottom of the stone looking through the top, it is probably not a diamond.
• Real diamonds are not perfect.  They have tiny internal flaws called “inclusions” and are often a little less than a perfect white colour.  A brilliant white stone, with no internal flaws and pretty rainbow colour internal reflections is not likely to be a diamond!

Here is a clever trick but it will only work with an unmounted stone:

• On a plain white piece of paper make a tiny black dot with the tip of a very fine pen
• Place the loose stone “face down” on the dot so that the dot is precisely centered under the stone
• Looking straight down through the “point” at the bottom of the stone, if your dot now looks like a circle, your stone is not a diamond

Here are some things a gemologist or appraiser may do that are hard for you to do:

• Use an ultraviolet light box.  Most diamonds emit a blue flourescence under ultraviolet light
• Use an x-ray machine.  Diamonds are basically transparent to x-rays while glass and other materials are somewhat opaque
• Use a diamond & Moissanite testing machine
• Use a heat probe.  Diamonds conduct heat more readily than other materials and this difference can be measured
• Use extremely precise scales.  For a like volume of stone, diamonds are quite light compared to other materials

Having said all of this, there is nothing to compare with a professional appraisal by a qualified gemologist

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