Wednesday, May 26, 2010

Your ultimate guide to buying and pricing handmade jewelry. Part 2.

This entry is going to put the basic definitions in  Part 1 to use as we continue to explore the intricacies of jewelry valuation.

Let's make four identical rings (see picture above): one from fine silver, one from fine ( or  pure) gold (24K), one from 14K gold and one from pure platinum. Although the rings have identical geometry, their weight will be very different due to the difference in  the density of the four metals. (The following table contains simplifications to make it easier to follow). Every ring has a volume of 0.576 cc.

                    The     silver   (Density:10.5 gr/cc) ring will weight :   6.1 gr or 3.92 dwt
                    The     24K    (Density:19.3 gr/cc) ring will weight : 11.1 gr or 7.13 dwt
                    The     14K    (Density:12.9 gr/cc) ring will weight :   7.4 gr or 4.76 dwt
                    The Platinum  (Density:21.4 gr/cc) ring will weight : 12.3 gr or 7.91 dwt

Here comes the tricky question: What is the weighth of the precious metal in each of the above rings. You could say - Hey, it ain't tricky, we just calculated that !

Or did we?
The silver   ring is pure silver, and it will have                                        3.92 dwt of silver content
The  24K   ring is pure gold, consequently it will have                                         7.13 dwt of gold content
The 14K   ring contains only 58.33% (by weighth) gold, consequently it will have 2.77 dwt gold content
The Plat  ring  is pure platinum, consequently it will have                                      7.91 dwt plat. content

Only one task left for today, and that is to  calculate how much money we need to spend on the precious
metals market if we want to make these rings.

Note: this is only one part of the PRODUCTION COSTS as you will see next time when we dig even deeper into the dark realities of life!

At the moment of writing this, the NY spot stands at (remember 1 TO=20 dwt):
                              Gold  : $1202.20/TO
                              Silver : $17.97/TO
                              Plat    : $1523.00/TO

From here it is just easy math:

The silver ring will cost    $ 3.52
The  24K   ring will cost  $ 428.58
The 14K   ring will cost   $ 166.50
The Plat  ring will cost     $ 602.35

One more interesting thing: If we could go back in time and purchased the metals fo rthis project in 2005, we could get away with the following costs:

The silver ring   $ 1.39
The  24K         $ 149.00
The 14K          $ 57.89
The Plat           $ 340.00

See you next time!

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