The livelihood of businesses that buy and recycle gold, such as jewelry stores and pawnbrokers, depends on being able to determine the accurate karat (K) weight of gold jewelry. The amount of gold in an alloy is measured with a unit called a karat. One karat is equal to one part in twenty-four, so an 18 karat gold ring contains 18 parts pure gold and 6 parts alloy material. The alloy material can be silver, copper, platinum, palladium, rhodium, nickel, brass, or other precious and non-precious metals. Failing to detect just a small variation in composition can be an expensive mistake. Gold currently sells for over $1,000 per ounce, while nickel is less than $5 per pound (and prices change daily).
The fire assay process is typically performed in large refineries equipped for this type of analysis. However, not all refineries are created equal as one pawn broker found out when two refineries came up with two significantly different results regarding the content of his precious metal.
The broker decided to test out a new refinery by sending his current refinery and the new company ingots of gold scrap from the same melt. The new refiner was sent 850g, while the current refiner was sent 600g.The bar sent to the current refiner was double-fire assayed with a return of 52.7% gold. The new refiner, however, returned 51.2% gold.
Does the 1.5% variation really matter? Well, for this particular transaction, this represents approximately a $150 difference for the metals. Consider the facts that the World Gold Council believes that gold recycling contributes a third global gold supply — and that gold jewelry demand was worth US$100 billion in 2014, and accounted for over half of global demand for gold — those numbers can add up to an astonishing amount.
So, how do we know which refiner is right? Prior to being sent to the refineries, both gold ingots were tested on the broker’s portable X-ray Fluorescence machine. X-ray Fluorescence (XRF) is a non-destructive analytical technique used to determine the elemental composition of materials. XRF quickly provides the exact karat weight and percentages of all elements within an item — easily identifying non-standard, under-karated, and even advanced counterfeit material. (Learn how XRF works in this free ebook: Portable XRF Technology for the Non-Scientist.)
The analyzer determined the samples had a gold content of 52.5%, nearly the same as the current refinery’s results.
If the pawnbroker did not compare, and instead chose to go with the new refiner for future scrap melts without verification, he could have lost a great deal of money. Using the XRF analyzer to validate the findings was a “far, far better thing to do” than just rely on one refiner’s results.
Read additional details about the two refineries, the fire assay method, and the instrument used in this case study: A Tale of Two Refineries.