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Overview
The value of gold is determined by the action of open markets. Because gold can be melted and reused for different purposes, most of the gold ever mined in recorded history still exists, although only a small percentage of it is on the market at any given time. The proliferation of electronic trading and metals backed ETFs as well as the abandonment of the gold standard for the U.S. dollar has made gold quite volatile by historic standards.
How Much Can a Person Sell 1Oz of Gold For?
The Facts
The value of gold is constantly changing as it trades in both futures and spot markets. Ultimately, the price a person can sell an ounce of gold for is whatever they can get someone to pay. But for reference, certain standards do exist. The price of a particular ounce of gold will depend on the purity of the metal, which can be anywhere from fine to scrap, and the form in which it exists, such as in jewelry, nuggets, or bullion.
Identification
The spot price is, in theory, the going price for an ounce of fine gold for immediate delivery at any given moment. In reality, most commercial or retail buyers will offer somewhat less than the spot price, roughly 5 percent, to help guarantee they can resell the gold at a profit. A private buyer, particularly one who speculates that the price of gold will appreciate, however, is likely to pay higher than the spot price. Internet auctions, such as those hosted by EBay, help connect sellers to these private buyers.
Types
Bullion is the most common and efficient vehicle for buying and selling gold, and one ounce quantities are most likely to appear in this form. But even among 1 oz fine gold bullion pieces, several types exist. The most highly sought category is bullion minted by national governments, of which the U.S. Gold Eagle (pictured above), the Canadian Maple, and the Chinese Panda are examples, though many others exist. Even for these particular countries, slight variations in purity between strikes is common. After nationally minted bullion comes that pressed by commonly recognized manufacturers, usually mining companies or large private mints. Finally, custom medallions and other commemorative pieces, which tend to command somewhat lower prices than other types of bullion.
Considerations
Scrap gold always sells below spot price because its purity is less consistent and less reliable than investment grade bullion and because it must melted and processed before it can be repoured into more valuable forms. The finest scrap, 24 karat gold, typically sells for 90 percent or more of the spot price, whereas the more common 18 karat gold used in jewelry might go for 75 percent of the spot price. 9 karat gold, the lowest quality scrap generally accepted, is worth as little as 35 percent of the spot price.
Potential
Gold was used as currency for most of recorded history, and it's only relatively recently that money in circulation has been utterly divorced from any metal backing. While it's unlikely the U.S. will ever return to a gold or silver backed currency as some advocate, many speculators in 2008 and 2009 speculated that the aftermath of the federal bailouts of the financial and auto industries would be profound annual deficits that would devalue the dollar and all major paper currencies. These speculators believe that a hyper inflationary environment could cause gold prices to soar to $2000 per ounce or more.
