How to Calculate Gold Price per Pennyweight: Conversion Instructions for the Non-Mathematical
Here are the basic instructions for how to calculate, in pennyweight, the price of your old gold jewelry, miscellaneous gold scrap, or any other gold items that you hope to sell, whether in 10k, 14k, 18k, or other karat weights. I will walk you through five easy steps teaching you how to:
- find the current price of gold in troy ounces
- convert troy ounces to pennyweight
- weigh the gold by karat units in grams, troy ounces, or pennyweight
- factor in the purity (in other words, the amount of actual precious metal versus base metal) of the gold alloy
- calculate the value of the gold in pennyweight. (I will be using U.S. dollars, but it's simple to convert the amount to a different currency.)
For your convenience, you can also find here a quick reference for pennyweight conversion to ounces, troy ounces, grams and grains.
When is Pennyweight Used?
Though troy ounces have become the standard weight for reporting gold prices, pennyweight is commonly used to measure:
- dental gold such as that used in crowns and inlays
- gold jewelry
The abbreviation for pennyweight, dwt, derives from denarius, the Latin word for penny.
Step 1 - Pennyweight Conversion: Find Out the Price of Gold Per Troy Ounce
Visit NASDAQ to find today's gold price per troy ounce, also called the spot price of gold.
As of this writing, in July of 2012, the price of gold is nearly $1,600, but another time it may be below $1,000 or even much higher.
But for now, as an example, let's use a nice round number and say the current gold price is $1,000 exactly.
Basic Pennyweight Conversion to Gram, Grain, and Troy Ounces
One pennyweight of gold, also called 1 dwt, equals:
- 1.555 grams
- 24 grains
- .05 troy ounces
- .055 ounces (standard)
For reverse conversion:
- 1 gram = .643 dwt
- 1 grain = .042 dwt
- 1 troy ounce = 20 dwt
- 1 standard avoirdupois ounce = 18.23 dwt
Step 2 - Convert From Troy Ounces
Use the conversion metrics in this article under the section Basic Pennyweight Conversion to Gram, Grain, and Troy Ounces to convert troy ounces to pennyweight. This will yield the gold price per pennyweight.
This is how to do it:
We see that one troy ounce equals 20 pennyweight of gold.
So using our example, since 1 troy ounce has a current value of $1,000, then 20 pennyweight of gold is worth $1,000. But we want to know the value of 1 dwt of gold, not 20.
So we divide $1,000 by 20 to calculate the gold price per pennyweight.
In this example, the gold price per pennyweight is $50 exactly.
Now it's time to calculate the value of the gold - in other words, what your actual gold scrap or other items are worth.
Step 3 - Weigh the Gold Scrap
Sort the gold jewelry, dental gold, gold bullion, gold coins, or whatever other items you have into separate units by karat - 10k, 12k, 14k, 18k, 24k. Leave out any items that are gold plated.
Weigh each karat unit separately using a pennyweight scale. Or, if you don't have a pennyweight scale, weigh the gold in grams or avoirdupois ounces first, then convert to pennyweight units using the conversion chart in this article.
For example's sake, pretend you weigh a rather hefty lot of 18K gold jewelry on an ounce scale and find out it is 5.5 ounces avoirdupois. You then convert it to pennyweight by multiplying 5.5 times 18.23 (see the chart) and discover it is 100.265 dwt, or, rounded off, 100.27 pennyweight of gold.
Or if you have a gram scale, let's say you weigh this same lot of 18K gold and find out it is 155.92 grams. Multiply 155.92 times .643 dwt to get 100.257 dwt, or, rounded off, 100.26 pennyweight of gold.
The difference in the two examples (100.27 vs. 100.26) is due to rounding off at various points in the calculations - so understand that these numbers are close approximations only.
Let's use the results from the gram scale. You have, in this example, 100.26 pennyweight of gold.
Step 4 - Factor in the Purity of the Alloy
Did you know that most gold is not pure? Most products have base metals in them, too, like nickel, copper, zinc, and tin. The amount of actual precious metal contained in circulating gold is standardized by the karat system. Only 24 karat gold and gold bullion sold for investment purposes are mostly all gold. All other objects contain significant amounts of base metal. If you are going to sell your gold, its value depends on how pure the gold is. So you must figure out how much actual gold is in your scrap gold items.
In our example, we have 100.26 pennyweight of gold. We must multiply this number times .75 (75 percent) for 18k gold.
If we had 10k gold, we would multiply by .4167 (41.7 percent)
If we had 14k gold, we would multiply by .5833 (58.3 percent).
If we had 24k gold, or gold bullion, we would not multiply by anything (actually, we would multiply by 1, which would give the same results)
To find the percentage of other karats, such as 9k, divide the karat number by 24.
In our example, 75.195 dwt is the actual amount of gold in pennyweight.
Step 5 - Calculate the Pennyweight Value of Gold
Now it's time to multiple the pennyweight of gold by the scrap gold price per pennyweight to get the value of the scrap gold.
Multiply 75.195 dwt times $50. The result is: $3,759. That is the spot price of your 18k scrap gold lot.
If you are in the UK, Canada, Australia, or other country, convert the dollar amount to pounds, Australian or Canadian dollars, or your currency.
Note: If you are going to sell the gold to a scrap gold dealer, pawn shop, or other scrap gold buyer, then you will probably get 20 percent to 50 percent less than this, since the dealer will take a cut.