Determining the value of a piece of gold can be tricky.
First, how much does the metal weigh? While the price of gold is normally quoted in dollars per troy ounce, large inventories are usually reported in metric tons – a completely different scale of measure. And neither weight matches the avoirdupois system which is used to weigh people and almost everything else in the United States. So, how much is your 18k gold bracelet worth? Confused yet?
For retail gold transactions, the troy ounce is predominant. Most coinage is based in troy ounces and the standard futures contract calls for delivery of 100 troy. The standard gold bar is specified as weighing 350-430 troy ounces, rather than the equivalent number of pounds. Still larger quantities of metal are often quoted in thousands and even millions of troy ounces – to maintain the ounce-based pricing.
At the smaller quantity level used mostly by jewelers, the troy ounce is broken down into 20 pennyweights – or 480 grains. That's it for troy weights. Grains, pennyweights, and ounces are used routinely; pounds and tons rarely.
Less prominent in the United States, but widely used elsewhere to weigh precious metals in all quantities is the beloved metric system. Metric weights are based on the gram, which weighs a bit less than a third of a troy ounce. 1,000 grams are called a kilogram and thousand kilograms (a million grams) equal a tonne – also known as a metric ton.
Here are the conversion factors between the Troy and Metric systems:
TO CONVERT TROY TO METRIC
To convert to grams multiply x .0648
To convert to grams multiply x 1.555
To convert to grams multiply x 31.10
To convert to kilograms multiplyx 0.031104
To convert to metric tons multiply x 0.000031
TO CONVERT TO TROY
To convert to grains multiply x 15.43
To convert to pennyweights multiply x .643
To convert to ounces multiply x .032
To convert to ounces multiply x 32.15
To convert to pennyweights multiply x 643.015
To convert to ounces multiply x 32,150.75
Use of these conversion factors eliminates the potential error which would result from using the lighter avoirdupois ounce.
And while there are other systems of weight – apothecary drams, imperial stone, avoirdupois ounces, etc – you can forget them! They aren't used for precious metals.
The carat is a particularly confusing customer. Yes, it is a measure of weight – but gemstone weight, not precious metal weight. A carat, with respect to gold, is a measure of purity. And to muddy the issue a tad more, it's abbreviated as k or kt.
Measuring the Purity of gold
Back to that 18k gold bracelet. It's 75% gold, because pure gold is too soft to be used as jewelry. Pure gold jewelry would be easily bent or scratched, so alloys are added to harden it.
Strictly speaking there is no such thing as 100% pure gold. Investment grade gold bullion and coins are generally refined to contain in excess of 99% gold content. And while there are different measures of gold purity, each ultimately describes the proportion of precious metal to alloy.
Again, not a weight for gold – a measure of purity for gold jewelry:
24 carat 99.9% or higher gold
22 carat 91.6%
21 carat 87.5%
20 carat 83.3%
18 carat 75.0%
15 carat 62.5%
14 carat 58.5%
Fineness is expressed in parts per thousand, just as percentage is parts per hundred. Fineness is the purity standard specification for investment grade bullion and coins. The London Bullion Market Association requires that bars for good delivery be at least 999.0 fine – or 99.9%.
To find the value of your gold, multiply the weight in troy ounces by the percentage of actual gold content and then, times the price per ounce.
For that bracelet: 2 ounces (troy) x .75 x gold at $1400/ounce = $2100 actual gold value
Which, of course, doesn't include sentimental value.