Determining the Gold Value in a Piece of Jewelry
There is a very simple formula for figuring the base price of gold per gram.
(Price of Raw Gold per Ounce) / 31.1 / 24 x (Gold Karat)
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For example, if the spot price of gold is $850.00 per ounce and you want to find out the base price of gold per gram for 14k gold. You would plug in:
850 / 31.1 / 24 x 14 = price per gram of 14k gold.
This would give you $15.94 per gram for 14k gold (For 18k gold replace the last figure of 14 with 18 instead, denoting the gold karat weight you are trying to determine).
This is the value of the raw gold before labor costs added on for gold jewelry, before markups for manufacturing, wholesale, or retail.
In other words, that is the scrap market value of a piece 14k gold.
Determining the Price of Gold Jewelry per Gram
The price of the jewelry item / The gram weight of the jewelry item = Price Per Gram.
For example, if you have a gold chain that is being offered for $725 and it weighs 23.0 grams, you would plug in:
725 / 23 = $31.52 per gram.
This is extremely useful in doing your price shopping comparisons when on the hunt for basic gold items such as gold chains and gold bracelets. This is not necessarily useful, however, in pricing items that are customarily sold by the piece, such as wedding bands, diamond rings, and jewelry with precious stones. The amount of design work and labor and other factors on such items makes them difficult and inaccurate to price based solely on the price of gold per gram.
In the above example, we have determined that the gold chain is priced at $31.52 per gram. By combining our two formulas and determining the value of the actual gold in the same piece of jewelry (when the gold market is valued at $850 per ounce), we can see that $15.94 per gram of the gold chain is actual gold value, while $15.58 is manufacturing and labor costs combined with wholesale and subsequently retail markup.
Or in the above case, taking a $750 23.0 gram chain yields (or in this case, $366.62 of actual 14k gold and $383.38 of manufacturing, labor, and markup).
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Category: Jewelry Tips