When you have attempted to buy or sell gold, silver, coins or jewelry you may have heard the term melt value. So what is melt value and what is so important about it? As a coin collector, new bullion investor, or a person cleaning out his or her old jewelry box, melt value can assist you in making better decisions.
What Is Melt Value?
Melt value is the present day value of the precious metal content of an item. It is the value of the metal contained in a coin, bar or jewel, as raw metal, calculated by melting it down and selling it. This is unlike how much the item may fetch at the shop or auction. It is merely the worth of the metal that it is- nothing less, nothing more.
As an example, you have a gold ring which weighs 10 grams and it is of 14-karat gold the melt value will give you how much the 10 grams of gold is worth in the current market price. It is called the spot price and it varies on a daily basis. You may also verify the current gold price per gram in order to estimate the price of your item.
Melt Value vs. Face Value vs. Market Value
Melt value can be confused with either face value or market value, however, they are not identical.
Face value is the value that is stamped on a coin such as 25 cent or one dollar. That is the value of the coin as currency. However, there are some coins, which are created with precious metals and are really worth much more than they are written on.
Market value is what you are able to sell something. This involves such things as design, rarity, age and collector demand. Even a rare coin that has a melt value of just 50 dollars could sell hundreds of dollars.
Melt value, however, does not pay any attention to that. It simply examines the weight and purity of the metal in the object and computes how much that metal is worth at the current time.
Why Melt Value Matters When Selling Gold, Silver, or Coins
Being aware of the melt value of your gold, silver, or coins will enable you to know their real base value. This is necessary when marketing. Lots of sellers (particularly pawn shops or gold shops) will give you a price on melt value not collector value.
Suppose you have a few pieces of silver in coins. When you are not aware of the melt value, you may end up with a small offer. However, when you know the coin melt value, you can be in a position to ensure that you are not underpaid.
The same applies to the scrap gold, broken jewelry or old silverware. A scrap gold calculator is one of the tools that many sellers resort to in order to calculate what they can expect to get out of these items.
Spot Prices: The Market Force Behind Melt Value
The most important determinant of melt value is the spot price. The spot price is the prevailing market price of one troy ounce of gold, silver, platinum or another precious metal.
The spot prices fluctuate all through the market hours. They are swayed by supply and demand, geopolitical incidents, economic news, and others. As an illustration, the prices of gold tend to go up when there is fear of inflation. Consequently, the value of the gold melt of your jewelry or coins will also increase.
This is why it is prudent to monitor the spot price when you consider to buy or sell precious metals. You may sell at a higher price when the spot prices are high.
Weight and Purity: The Two Keys to Melt Value
In order to compute melt value, you should know two facts: the weight of the piece and its purity.
Purity is the proportion of the object produced with a precious metal. An illustration shows that 24-karat gold is pure gold and 14-karat gold contains 58.3 percent of gold. Sterling silver tends to be 92.5 percent silver. The remainder of the item is composed of other metals which are not to be included in the melt value.
Weight is typically given in grams or troy ounces. The greater the amount of metal your object possesses, the greater the melt value. A slight weight change can have an influence on the final number.
In order to obtain a correct melt value, you multiply the weight by the purity to determine how much pure metal you possess. And then multiply that by the present spot. This will provide you with a good estimation of the melt value.
How to Calculate Melt Value Easily
Melt value can be confusing to compute manually and even more so when you are not well versed with percentages of purity or current market prices. Online tools are where it comes in.
Websites such as MeltCalculator.com can provide free and simple calculators of gold, silver, platinum, etc. All you have to do is put in the weight, and select the purity (such as 10k, 14k or 24k in the case of gold) and the calculator does it all. It provides you with quick melt value based on actual spot prices in real time.
It is easy to know the value of your items in terms of metal content alone, be it you are a collector or simply disposing your jewelry drawer.
FAQs
How does the gold melt value differ with market value?
The lowest value of the gold content of an item is referred to as gold melt value, which is purely dependent on weight and purity. The other factors that determine market value are design, condition or brand.
What is the melt value of my coins?
You may enter the weight of the coin and its purity using a tool such as MeltCalculator.com. It will compute the melt value using the prevailing spot prices.
What is the reason why the melt value is lower than the price I paid on jewelry?
The jewelry cost is composed of design, labor, and retail markup. Melt value shows nothing more than the value of the raw metal within.
Am I allowed to sell my gold or silver at the melt price?
Yes, a lot of purchasers including pawn shops and gold dealers purchase products by their melt value. Offers however can be a little lower to cover refining and resale costs.
Conclusion
Anyone who has to do with precious metals should have knowledge about melt value. It makes you skip bad deals and make wiser decisions. Whether you are selling old jewelry or purchasing bullion, the melt value is something that will have you in control.