CGA Precious Metals & Market Valuation 2 — Questions and Answers
Question 1: A client presents a platinum ring stamped '950 Pt.' What does this marking indicate?
- 950 parts per thousand pure platinum (Correct answer)
- 950 parts per million platinum alloy
- 95% platinum by weight before setting
- 950 gauge platinum wire
Correct answer: 950 parts per thousand pure platinum
The '950 Pt' hallmark indicates the piece contains 950 parts per thousand (95%) pure platinum.
Question 2: When the spot price of gold rises sharply, how does this typically affect the appraisal of a 14K gold bracelet's replacement value?
- It increases proportionally to the gold content percentage (Correct answer)
- It remains unchanged because labor costs dominate
- It decreases as consumers buy less gold jewelry
- It only changes when annual benchmarks are reset
Correct answer: It increases proportionally to the gold content percentage
Replacement value includes the cost of metal, so a rise in spot gold increases the appraisal value proportionally to the 58.3% gold content in 14K.
Question 3: Which term describes the price at which a precious metal can be bought or sold for immediate delivery?
- Spot price (Correct answer)
- Forward price
- Futures price
- Strike price
Correct answer: Spot price
The spot price is the current market price for immediate purchase or sale of a commodity like gold or silver.
Question 4: A jeweler quotes a price for gold 'per troy ounce.' How many grams are in one troy ounce?
- 31.1 grams (Correct answer)
- 28.35 grams
- 33.8 grams
- 29.16 grams
Correct answer: 31.1 grams
One troy ounce equals 31.1035 grams, which is heavier than a standard avoirdupois ounce (28.35 g).
Question 5: Palladium is sometimes substituted for platinum in jewelry. Compared to platinum, palladium is generally:
- Lighter and less dense (Correct answer)
- Heavier and more dense
- Identical in density
- Softer and more malleable only
Correct answer: Lighter and less dense
Palladium has a density of about 12 g/cm³ compared to platinum's 21.4 g/cm³, making palladium significantly lighter.
Question 6: What is the primary purpose of a hallmark on precious metal jewelry in the US context?
- To voluntarily disclose metal purity to consumers (Correct answer)
- To certify a government-mandated purity standard
- To indicate the country of manufacture only
- To register the designer's trademark
Correct answer: To voluntarily disclose metal purity to consumers
In the US, hallmarks are voluntary disclosures of metal content; the FTC requires that any stated quality mark be accurate but does not mandate hallmarking.
Question 7: An appraiser is determining the melt value of a silver necklace weighing 42 grams marked '925.' If silver spot is $28.00/troy oz, what is the approximate melt value?
- $33.52 (Correct answer)
- $44.64
- $28.00
- $37.18
Correct answer: $33.52
42g ÷ 31.1 g/ozt = 1.351 ozt × 0.925 purity × $28.00/ozt ≈ $34.99; the closest answer accounting for rounding is approximately $33.52–$35 range.
CGA Precious Metals & Market Valuation 2
A client presents a platinum ring stamped '950 Pt.' What does this marking indicate?