Gold Smelting

by goldbullion on 03/03/2012 - 01:18 pm |

Tags: Gold, Metals Investing

Gold Smelting

Those who choose to invest in gold are often faced with the possibility of sending their gold dust, coins, or scrap gold to a smelter. A smelter does more than just melt the gold into a bar. Gold smelting is the process by which impurities are removed from the gold. This is accomplished by using pressure, heat, and certain chemicals. Once the process is complete, the smelter is left with a remarkably pure material.
The first step of the smelting process involves processing the raw ore. The gold material is pulverized into fine particles. These particles are then placed into a furnace that has reached a temperature above gold’s melting point. This burns off many of the impurities found in gold but not all.
The second step involves the introduction of chemicals to separate the pure gold from other minerals and metals. The chemicals that are typically used are potassium cyanide and mercury. These two chemicals cause the melted gold to coagulate and form pure nuggets.
Once the gold ore and scrap gold have been refined, the gold is placed back into the furnace to be melted one more time. This pure gold is melted then poured into a mold to form ingots. Ingots are essentially gold bars and come in a variety of shapes and sizes. This pure gold can be used to make a variety of electrical components, jewelry or it can simply be used as a store of value.
Gold smelting is not a complicated process, but it does require specialized equipment. Would be gold investors should be aware of the process before they purchase raw ore. Raw ore is cheaper than pure, smelted gold because it contains impurities. When purchasing gold ore, investors are also purchasing the worthless material that clings to gold. If purchasing gold as an investment, it is a better option to purchase already smelted gold.

Why are there so many companies buyin...

by goldbullion on 03/03/2012 - 01:05 pm |

Tags: Gold, Metals Investing

Why are there so many companies buying scrap gold?

We have all seen the television commercials where a respectable looking gentleman promises to pay you big money for your old jewelry or scrap gold. The proliferation of scrap gold companies can mean only one thing. There is big money to be made buying and then reselling scrap gold.   To understand why this once very small segment of the gold industry has become so profitable, it is helpful to look at the process of a typical transaction between a customer and a scrap gold buyer. The way it typically works is as follows. An individual who may be down on his or her luck and in need of money will bring a few gold chains or some gold jewelry down to a store that offers to buy their gold. The proprietor will evaluate the gold content of the items. An offer will be made to buy the gold for something below the spot value of the gold.   Most gold jewelry is not pure gold. Only items made of 24 karat gold are considered pure gold. Typically, a customer will bring in 14 karat or maybe 18 karat gold. If it is 14 karat gold, it only contains 14/24 pure gold or a little less than 60% pure gold. The dealer will then consider the current spot price of the precious metal and the amount that they can get when they sell the gold to a company that melts down scrap jewelry to extract the gold.   The customer is often surprised to learn that his 10 ounces of gold jewelry only contains 2 or 3 ounces of pure gold. Then, the customer is in for another shock. The proprietor will tell the customer that there are costs to refine and recycle the gold. By the time the entire transaction is explained, the customer is lucky to walk out of the store with 50% of the spot value of the pure gold content.   What is not a good deal for the customer is a very good deal for the company that buys the scrap jewelry. They can turn around and easily get 80%-85% of the weight of the pure gold from a smelting company that refines the gold and turns it into pure gold ingots. With today's spot price of gold over $$1,700 per troy ounce, a scrap seller can easily make $500 or more per ounce of gold he sells to a refiner. That is why so many people are in this type of business.    
 

Gold Resellers

by goldbullion on 03/03/2012 - 12:49 pm |

Tags: Gold, Metals Investing

Gold Resellers

Sometimes, you're looking to sell your gold jewelry for cash. How do you know whether your gold will be acceptable to the company you're attempting to sell to? Ask if they are a gold buyer or a gold reseller. If the company is a gold buyer, then any gold will be acceptable, in any condition. If they are a gold reseller, they will have higher standards than a gold buyer.    A gold reseller is looking to purchase gold jewelry at a premium price and resell it. To do this, they want the highest purity gold, and in the best condition. If the gold jewelry is not able to resold at a premium price, they will not purchase it. For this reason, gold resellers will pay higher value for your jewelry when it is in top condition. A gold buyer will purchase your jewelry if it does not pass the high standards of gold resellers.    If you have top quality gold, you can claim top dollar for that gold with a gold reseller. So long as the jewelry is not tarnished, broken, chipped, or missing parts, you can get the maximum value for the item. Gold resellers are not looking to melt the gold down into new gold items. They want to purchase your gold, and resell it without additional processing steps.    A gold buyer will provide the highest prices available with the markets for your broken gold jewelry. Gold buyers purchase gold, melt it down, and resell it in new forms. For this reason, they are not as strict with the condition of the gold as a gold reseller.    By understanding the difference between gold buyers and gold resellers, you can save yourself some time and headache, while obtaining the maximum amount of cash possible for your old gold jewelry.
 

Is now the right time to invest in gold?

by goldbullion on 03/03/2012 - 12:36 pm |

Tags: Gold, Metals Investing

Is now the right time to invest in gold?

Many people are intrigued by the opportunity to invest in gold. Today, with the price per Troy ounce hovering around the $1,750 mark, interest in the precious metal is at a high level. Many gold companies are flooding the airwaves with ads looking to capitalize on the public's seemingly unquenchable thirst to add gold to their portfolio. How do you know if now is the right time to invest in gold?   Like every other investment decision one might make, it is important to know as much as you can before turning over your hard-earned cash.  It is never really smart to jump into an investment simply because you see everyone else getting into the market. While there is a chance that the investment will continue to rise, there is also a chance that you are buying in at the peak of the market.   There is no way to be certain of the future. Most experts do agree that in the long-term, gold has the potential to rise significantly higher than its current price. Only a few analysts believe that the precious metal will drop below $1,000 per ounce. These views are not simply the views of "gold bugs" that have their own selfish interests at heart. Economists and analysts widely agree that the political and economic conditions in the world make it very likely that gold will surpass $2,000 and maybe even hit $3,000 before too long.   Timing is an essential part of successful investing in gold. Everyone wants to buy low and sell high. However, the trick is to know when prices are high and when they are not. If one has a long term time horizon of at least 5 years, a strategy of buying and holding gold will very likely pay off.   In the next 6 months to a year, gold prices may fluctuate up or down in a $200 range. Looking at historical charts, the long term trend looks to be a slow and steady rise. Now might be the perfect time to start buying gold. Follow a strategy of periodically purchasing the precious metal over the next several years. Gold does particularly well when there is political and economic uncertainty.   Our world is in turmoil, both politically and economically. It will be years before the world economies recover and one never knows when the next major war will break out. Inflation is quite likely to return and the demand for gold is constantly growing. All of these factors make the case for long term investors to start adding gold to their portfolio right now.

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