Have you been thinking about buying gold and silver on eBay? Learn how to avoid the common pitfalls of buying gold and silver through auction sites in this 3 part series of articles.
In part 1 you learned how to read a listing to avoid scams.
In part 2, you will learn how to evaluate the quality and quantity of gold and silver being offered.
Gold and Silver are measured and sold in a variety of ways.
It is important to understand these measures of weight and purity so you know how much precious metal you will receive and how much it is worth.
Gold and silver are measured in Troy ounces which are heavier than standard (avoirdupois) ounces.
A troy ounce weighs 31.
1 g versus 28.
35 g for a normal ounce.
The other weight measurement used is the grain (about 64.
8 mg).
There are about 15.
4 grains in a gram and 480 grains in a Troy Ounce.
Gold and Silver bullion bars are also sold in 1, 2.
5, 5, 10, 20, 50, and 100 gram sizes as well as in 1, 2.
5 and 5 grain sizes.
Coins are typically sold as fractions of ounces (for e.
g.
, 1/2, 1/4, 1/10, 1/20 ounce).
If you want to buy larger quantities of gold and silver they are typically available in larger bars (5, 10, 20, 50, 100 ounce sizes and more).
I have seen gold and silver sold in a variety of weights on eBay.
When you see a listing and calculate the value of the gold by weight you can quickly determine whether the bid price is a good value.
Based on gold priced at $1200 per troy ounce, a grain of gold is worth $2.
50 and a gram is worth $38.
50.
Similarly, based on silver priced at $20 an ounce, a gram of silver is worth about $0.
65 and 5 ounces is worth about #100.
You should be able to use these numbers to get a rough idea of the value of gold or silver in an auction.
I see a lot of auctions that close with hefty profits for the seller.
This is probably because the buyer did not know the real value of the gold or silver being offered.
You also need to pay attention to purity of the gold being offered.
Purity is often measured in karats with pure gold equaling 24 karats.
The other common measure of purity is "fineness.
" This expressed as a percentage of purity.
Some coins and bullion bars reach 0.
99999 ("5 nines") purity but most are 0.
9999 or 0.
999 per cent pure.
Gold and silver bullion bars and coins will typically be stamped with their weight and purity.
Bars are also stamped with the name of the refinery where they were manufactured.
I recommend that you only buy gold and silver of known weight and purity.
If you are buying for investment purposes, stick to gold and silver bullion in coin or bar form.
This way you can easily determine the value of your holdings should you decide to sell it.
In part 3, you will learn to bid wisely by determining the market price of an auction.