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Gold Karats
Gold is almost always paired with another alloy. Pure gold that has absolutely no other metals present is designated as 24 karat. Lesser karats indicate that the gold has been mixed with other metals. The price of the gold is directly based on its purity. Therefore, scrap 12 karat gold is worth less than scrap 24 karat gold because it is not as pure.
Pricing
Weigh the total amount of scrap gold you would like to buy. Divide the karat of your scrap gold by 24, and then multiply this figure by the current price of gold.
The price of gold fluctuates worldwide and is based on a per troy ounce price. There are 31.1 grams in a troy ounce. If you had 21 grams of 18 karat gold, for example, and the market price of gold is $1,200 an ounce, you would perform the following calculation:
18 karats divided by 24 karats = 0.75
$1,200 dollars per ounce divided by 31.1 grams = $38.58 per gram
0.75 x $38.58 = $28.935 per gram
Profit Margin
To make a profit from the scrap gold you buy, you should take a 10 to 20 percent markdown off the going market price. The markdown will vary on the karat of the gold. The process of extracting lower karat gold is more expensive than that for higher karat gold. Therefore, you should take a higher markdown on lower karat scrap gold.
Using the previous example, although the 21 grams of gold would have a total market price of $607.64, you should purchase the gold for $488 to $547. This discount will allow you to prepare the gold to be resold at a profit.
Fluctuating Gold Value: Buy Low, Sell High
Your profit will also be impacted by what the current price of gold is on that particular day. If you bought the gold at $1,200 per ounce, for example, and try to sell the gold when the price is $900 per ounce, you will take a loss. Anticipating the trends of the gold market will help you profitably buy scrap gold.