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How is the Gold Price Per Ounce Calculated


Gold Price Per Ounce

When pricing gold per ounce, several factors need to be considered. The current market demand, geopolitical stability, current inflation, and the policies of central banks are all criteria that are factored in. Gold is a commodity that is also traded internationally and so its price can vary multiple times during the course of one trading. The following explains how you can figure out the price per ounce of gold per gram for each different karat.

gold price per ounce

Understanding How Gold Price Is Determined

The price of gold is determined in the global economy based on competing market forces, so it changes throughout the day constantly, while the gold spot market is active. Currently the price of gold is measured in Troy ounces. One Troy ounce equates 31.1 grams. The New York Mercantile Exchange (NYMEX) and the London Bullion Market, global exchanges, update the price on a regular basis.

The price of gold is determined by several factors:

  • Market demand and supply: as with all commodities, supply and demand determine the current price of gold. The price increases as more investors want it. When fewer seek it, the price lowers.
  • Currency value: gold is considered a protective agent against inflation. Therefore, when a currency decreases in value, the demand for gold goes up, which automatically requires a higher price.
  • Geopolitical stability: political or economic instability usually causes gold to increase in price, as investors look for stability.
14K Gold Bezel Pendant for 1 Oz American Eagle Coin
14K Gold Bezel Pendant for 1 Oz American Eagle Coin

How to Calculate the Current Price of Gold

In order to see what the current price is, one needs to refer to financial news outlets, bullion dealers, or global financial institutions, such as those mentioned above. They will provide the most up-to-date price. Websites, such as Kitco.com provide the latest gold market spot prices, which is who we refer to for daily gold prices.

Gold Price Formula

To explain in a little more detail how to calculate the current price:

If on any given day, the current price for 24K gold, the purest, is in our example scenario at $2500 per ounce. But to calculate the price per gram of 14K, you have to know what percentage of pure gold it contains and then calculate the price accordingly.

Formula to Calculate Gold Price / Gram for Each Karat

24K, the purest form of gold is 100% gold, no alloys. 14K and 18K have lower amounts of gold mixed with other compounds such as copper or silver to add durability. Listed below is the formula for calculating the price per gram for each karat weight.

18K Gold Tube Cross Pendant
18K Solid Gold Tube Cross Pendant

Gold Formula Per Karat

Gold Price per Gram=Gold Price ​

Gold Price Per Ounce / Gram Formula

Example: for our example case of gold at $2,500/ounce, you can calculate the price per gram as follows for 14K, 18K, and 22K:

14K Gold Price Per Gram

  • 14K gold has 58.3% of gold
  • Formula:
14K Gold Price Per Gram Formula

18K Gold Price Per Gram

  • 18K gold has 75% pure gold.
  • Formula:
18K Gold Price Per Gram Formula

22K Gold Price Per Gram

  • 22K gold is 91.7% pure gold.
  • Formula:
22K Gold Price Per Gram Formula

Step-by-Step Approach to Calculate Gold Price for Various Karats

  1. Find the Current Gold Price per Ounce: see above how to find out.
  1. Convert to Troy Grams: remember there are 31.1 grams in a Troy ounce, therefore divide the gold price by 31.1.
  1. Adjust for Karat level: Multiply the result by the percentage of gold in the karat (14K is 58.3%, 18K is 75%, 22K is 91.7%).
14K Gold Rope Chains
14K Gold Rope Chains

Why Karat Purity Matters

  • 14K Gold: due to the alloys added to the 58.3% gold this karat is more durable than a higher-karat gold. It has a more subtle yellow hue than the others and is more appropriate for daily wear by someone who doesn’t wish to draw attention. For example, try testing out this formula on any of our gold bezels and see if you can figure out the price per gram of each piece.
  • 18K Gold: at 75% gold, this one provides a richer, warmer color compared to 14K. This is a very popular choice for those who want to maintain elegance but also make a subtle statement, due to an exceptional balance of elegance, rich color and durability, as you see in Apples of Gold’s 18k gold cross pendants, which are made substantially in order to last.
  • 22K Gold: With 91.7% gold composition, this offers the warmest and boldest color, but because it doesn’t contain the strengthening alloys it also is softer and more likely to develop scratches over time. It can be used for high-quality, decorative 22k gold jewelry, which tends to be the highest karat available for gold jewelry.

Factors Influencing Gold Jewelry Pricing

There are a few other aspects that will influence the final gold price:

Handmade 14K Gold 10.5mm Curb Link Bracelet
Handmade 14K Gold 10.5mm Curb Link Bracelet
  • Jeweler’s Markup: Retail jewelers will usually add to the base price.
  • Manufacturing Cost: Manufacturers add a number of dollars per gram for their time and labor as well as gold loss that is factored in during manufacturing and polishing.
  • Design Complexity: the more intricate designs may come at a higher cost due to the additional labor required. Higher karats can also cost more due to labor intensity of each metal.

Calculating the Right Price for Gold Jewelry

Making the decision as to which gold jewelry piece is right for you is a very personal one and, therefore, a very important one. It is essential to be pre-informed about the current gold price, so you know when you are being taken advantage of, and what the karat levels represent. However, be sure to allow room for the factors we mentioned above, such as: gold price, manufacturing cost, time, labor, and retail jewelry mark-up.

An exorbitant mark-up is called triple keystone, which is marked up 3X the wholesale cost or 300%. Keystone pricing is more reasonable, considering all the different factors mentioned, which is 2X mark up or 100%.

14K Gold Men's Polished Cross Pendant
14K Gold Men's Polished Cross Pendant

Apples of Gold Jewelry employs a value-based approach to pricing fine jewelry and understanding the gold price per ounce. We offer a large selection of subtle, elegant, durable, and sophisticated pieces with a variety of karat, that are made to stand the test of time. Armed with this knowledge, you can more easily make a wise decision that you will bless you and the generations to follow.

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