How to Determine the Worth of Gold
For most of history, humans have viewed Gold as a valuable commodity, both for its aesthetic beauty as well as its importance as a metal for practical industrial and medical uses. As of 2009, it is estimated that roughly 165,000 tons of gold have been mined throughout human history. About 50% of this gold has been used to create jewelry, 40% is used in investments and stored in various forms such as gold bullion in vaults around the world, and the remaining 10% is used in industrial and medical applications such as electrical circuit boards and dentristry fillings. With this in mind, one might wonder, how exactly is gold valued? The answer to this question is quite complex, and depends on many different factors. However, in general, the price of gold tends to be inversely related to the stability and value of various currencies.
As economies face inflation and instability, the value of gold tends to rise. The reason why this is so is because many people view gold as a universal commodity. So, while the value of their life savings in U.S. dollars, Euros, or Yen might fluctuate as a result of certain geopolitical events that take place, the value of their gold will maintain its market rate regardless of where they are in the world. In other words, an ounce of gold in the U.S. should theoretically hold the same value as an ounce of gold anywhere else in the world.
Based on this, pure gold in raw form is generally valued based on its weight. This value is constantly fluctuating and can be found easily in numerous reputable sources. For instance, the Wall Street Journal publishes gold rates on a daily basis. There are many highly regarded websites that also provide similar information. Some of these include goldprice.org, which provides an up-to-minute quote on gold prices, and also shows gold’s historical performance. Kitco.com is a similar site that also provides current information about the value of gold.
However, the type of gold you have (i.e. jewelry, coinage, bullion, scrap, etc) will determine how you find its value. For example, while gold coins such as the South African Kruggerand, the American Eagle, and Canadian Maple Leaf are exactly one ounce of pure gold, their value is higher than an ounce of gold based on the collectability of the coin. Similarly, in determining the value of jewelry and other gold items, it will be important to determine what karat of fineness the gold is. 24 karat gold is considered to be the most pure, while other common, less pure mixes of gold include 10k, 14k, and 18k.
Although in most cases the fineness of gold jewelry can be determined by stamps on it (e.g. a little stamp that says 10k, 14k,18k, 24k, etc.) in some cases this will not be true. Luckily, you can find out the fineness of your gold on your own by ordering an acid test online and conducting the examination at home. These test kits are fairly inexpensive and very easy to use. Once you determine the fineness of your gold, the next important step will be figuring out how much it weighs. This can be done using a jewelers scale. With the weight and fineness of your gold determined, finding out its exact value should be simple.
