You are probably asking yourself how much a buyer of gold would pay for any type or amount of raw, unprocessed, natural, or mined gold. This article will show how I calculate my cash offers for such acquisitions.
Raw gold samples can have many variables. There are art and science involved in this process. It is crucial to have a lot of experience and information to succeed. There must be enough error margin to allow for safe and high-quality payments. It should be so that even if the outcome is lower than expected, it will still be profitable. The offer must also be superior to the rest.
Gold is not pure in its natural state or unprocessed, unprocessed condition. It is a naturally-occurring gold-bearing alloy. You can expect a sample of raw gold to be 18K / 75% or 750 parts per million in fineness, as I have explained in other articles on this site.
This article will explain how to make a gold-buying offer. It will also show you how to acquire a real-life gold nugget. Understanding the terms and concepts of gold buying is key to understanding. To simplify the explanation and keep it short, I’ll refer to the “gold-bearing” alloy as “gold.”
In a natural state, unprocessed gold-bearing alloys such as nuggets and flakes are not 100% mineral-free. Raw gold is generally made from dirt. It is important to note that, aside from the metal (gold-bearing alloy), there are many non-metal elements (dirt). In the case of extremely clean gold dust, for example, any additional dirt removed without refining will usually result in the loss of gold particles.
I am a buyer of gold and only purchase karat. I’m not a miner, so I don’t buy gold ore. This article does not include information about how much gold is contained in a sample of gold ore. This is how I make cash offers to buy unprocessed gold. To be able to purchase unprocessed ore, it takes experience and research. This is important to remember.
How to buy raw gold
- I examine the gold in its natural state. I inspect the gold to make sure it feels and looks like gold. Based on my experience, even though the material may appear clean, it will still contain some dirt. Even the most pristine samples can still have at least 3% dirt, even though it isn’t visible to the naked eye.
- How fine the gold is. This is mainly based on experience. The color of a sample is not an indicator. A raw gold sample with iron traces will be darker than one without. The material will be similar to 18K, which is a realistic expectation. This is a good starting point to bid on gold nuggets, flakes, and gold dust. Raw gold can be as high as 23K, but this isn’t easy to prove without scientific methods.
- I estimate my nominal fineness. Based on this, I offer my services based on how clean and pleasing I expect them to be. This is my “nominal fineness estimate.” This means I can show a gold price of 18K for gold which is 18K fine and clean, based on my estimate. If there is a lot (of dirt) in the sample, I offer 22K or 20K.
- Based on the amount of dirt present and my nominal gold fineness estimate, I can expect my “effective” result in gold fineness. This is why. I would offer 18K for the entire mass, including dirt. This is the gold price for the dirt. After discounting dirt, I get the same dollar amount for the same quantity of pure gold. The amount I pay remains the same, but the mass is less, so I’m paying the same but getting less. I pay more for the same quality. It can also be seen that I pay more for the same material. My “effective” result payment will be of a higher fineness than my “nominal.” If I pay a nominal 18K fineness fee for a raw-gold sample of 10 grams and the after-melt weight of 9 grams is 20K, then I have spent 20K for adequate fineness since there was a loss of 1 gram.
- Based on the information I have gathered, some calculations, the current gold market, and some other matters and my experience, we make an offer for the raw gold.
Raw Gold: Real-Life Examples
The information available at the offer time:
Mass of the gold lot: 409.2 grams
Excellent sample. Very little dirt.
Lots of un-uniformly minted gold. Multiple types and origins
This offer was better than the 18K I’m used to. It was more like a 19K offer. This gave me the freedom to play with the unknowns.
Refinery Result
Pre-melt mass: 409.2 grams
Post-melt mass: 403 grams
Mass Loss: 6.2 grams, 2%.
Fineness: 85.4% (854 pieces per 1000), or 20.4 Karat
I could make a safe offer while still making a high-dollar offer by offering an unprocessed lot of gold my 19K (79%) estimate. Even better than I expected, the lot yielded 20.4 karat, which is almost 19K more than my offer. It is unlikely that the lot would have been sold at 18K (75%) fineness if it had worked in the opposite direction. This is below my offer but still within my expectations.
Conclusion: How to buy raw gold
It is easy to buy gold nuggets, flakes, or dust. However, it is an art form. There is no one-size fits all method for buying gold nuggets, chips, or dust. It takes a lot of experience. Raw gold rarely falls below 18K and rarely exceeds 22K. It is essential to consider how much dirt the sample of gold has. The best indicator of fineness is color. For the most competitive offer on the raw gold lot, make sure there is some room for finer than expected and not too much for finer than expected.