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Getting The Best Price for Gold Chains


Getting the best price for gold chains is easier than you think. Here are the major points to consider when doing price comparisons on your next gold chain. We also price match gold chains.

PRICE PER GRAM

gold rope chains

The first, most basic thing to do is to compare the weight of the gold chains you are considering purchasing. Let’s use 14k gold chains are our example.

STEP #1

Compare the same style of gold chain. For example, a gold link chain such as curb or figaro chain is going to be less labor intensive for manufacturers to create than gold rope chains. Always compare the same design or style.

STEP #2

To do this, you first have to obtain the gram weight of the particular necklace you are comparing. Let’s use a A 20.0 gram 14k solid gold link chain that costs $1,625. If the same chain is listed at 20.0 grams for $1,500 elsewhere, you are obviously getting the better deal at $1,500. But sometimes, a 4mm solid gold figaro chain may have differing weights at different places, because it may be thinner or thicker or the links may have more open spaces in between the links. So the same chain may cost less, but it also may weight less. So it’s imperative that you first compare gold weights rather than just price or size.

STEP #3.

OK, the formula. All you have to do know the price of gold per gram and a short mathematical formula. For our example, let’s use $2,000 gold per troy ounce and a 20.0 gram 14k solid gold chain. Next, use the formula below to obtain the “per gram price” for for 14k gold.

PRICE OF GOLD + PREMIUM / 31.1 / 24 x 14

Let’s explain the formula.

The PREMIUM is what gold manufacturers use to determine gold loss in polishing and the manufacturing process. For our example, let’s use $100 to cover precious metals loss.

31.1 is the number of grams per troy ounce. 24 is the karat of pure gold. 14 is for 14K. (If you are trying to obtain the price of gold per gram for 18k, you would replace the 14 with 18 in the formula above).

Let’s try it.

$2,000 + $100 / 31.1 = $67.52

$67.52 / 24 = $2.81

$2.81 x 14 = $39.34.

We now have our base price per gram for 14k gold. So if that 20.0 gram chain were to be melted down as scrap gold, it would be worth about $786.80. That is the precious metals value from a manufacturing or gold refiner’s perspective (give or take depending on the premium and loss). Of course, no refiner is going to give you full value if you are scrapping your gold. But this gives you an idea.

DETERMINING THE PRICE PER GRAM

If you are looking at a 20.0 gram chain that costs $1,975, divide $1,775 / 20 to get the price per gram of your particular gold chain, which in this case would be $88.75 per gram. Remember the base price we determine at $39.34? Subtract it from the price per gram of the jewelry in question, and $49.41 per gram is the balance ($988). This balance of $988 on a $1,775 gold chain includes the manufacturer’s labor, gold loss in manufacturing, and markup. It also includes the markup from the wholesaler to the retailer and the jewelry retailer to you. It is actually not unreasonable. In other words, that is a 46% markup split between at least 3 parties: the manufacturer, the wholesaler and the retailer.

PRICE COMPARISONS

Now, that you know the price per gram of your chain, which in our example case above is $88.75 per gram. You can compare it to another chain. For example, let’s say there is a similar gold link chain (CHAIN X) that is 23 grams but it costs $2,000 vs. the 20.0 gram chain (CHAIN Y) at $1,775. Even though CHAIN X is $225 more expensive, you are getting an extra 3 grams of gold. Is it worth it? When we do our calculations, you are actually paying $86.95 per gram with the heavier chain, meaning that it actually costs less for the amount of gold you are purchasing, even though on the surface it appears to cost more.

Equipped with the knowledge of the price per gram in 14k, 18k or even 22k, you can now legitimately price compare. But this is not the only factor. Let’s look at 1 final variable.

LABOR, QUALITY, STYLE & SERVICE

As I mentioned earlier, a gold rope chain is more labor intensive than a gold link chain, because rope chains are often handmade where as most link chains are mass produced, so the labor is less. So you cannot really compare a gold figaro or curb chain to a diamond-cut rope chain. Compare the same style to the same style.

You also need to consider whether you are purchasing a speciality chain, like a handmade designer chain vs. a mass-produced and machined chain. Is your chain made in the U.S. or is it made in a foreign country? All of these factors play a part when comparing jewelry.

Finally, is paying a small premium to shop at a more reliable jeweler, like Apples of Gold Jewelry, worth $2 or $3 extra per gram? Consider things like availability of customer service. Can you call or email your jeweler and get a fast response? Do they offer free shipping or charge sales tax in your State? What about the quality of one jewelry company or manufacturer over another? All of these are important factors.

Apples of Gold Jewelry is very competitive in our pricing, especially when it comes to items like gold chains. But can you find a chain for less at a defunct website with no stock availability or where the customer service is absent? Do you risk getting low karat gold advertised as 14K from stores that are selling below what the market demands? Trust is a major factor.

Lastly, and this is an often overlooked point: you cannot adequately use this formula to determine the value of more unique jewelry, such as a a handmade gold cross or an individually crafted item or a jewelry piece with more intrinsic value. A Gold chain is a simple item and one of the easiest to do price comparisons on, because they are so abundant and so many jewelers are competing for virtually the same item. But a uniquely made engagement ring, pendant, bracelet, etc. may be another story.

I hope this has informed you to get the best value for your gold jewelry purchases. If you see a gold chain at Apples of Gold that you are interested in, please do not hesitate to contact us, especially if you are doing price comparisons, so that we may have the opportunity to either price match or help you understand the differences in quality, style and service.

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