CGA Precious Metals & Market Valuation 3 — Questions and Answers
Question 1: Which precious metal is most commonly alloyed with gold to create white gold?
- Nickel or palladium (Correct answer)
- Silver or copper
- Platinum or osmium
- Rhodium or iridium
Correct answer: Nickel or palladium
White gold is typically alloyed with nickel (common in older pieces) or palladium (in hypoallergenic modern pieces) to achieve its white color.
Question 2: Rhodium plating is applied to white gold jewelry primarily to:
- Enhance whiteness and add scratch resistance (Correct answer)
- Increase the karat fineness of the piece
- Reduce metal porosity and fill casting flaws
- Permanently bond gemstones to the setting
Correct answer: Enhance whiteness and add scratch resistance
Rhodium electroplating gives white gold a bright, highly reflective white surface and improves hardness and scratch resistance.
Question 3: The London Bullion Market Association (LBMA) publishes daily gold and silver prices known as the LBMA Gold Price. These benchmarks are established through:
- An electronic auction process twice daily (Correct answer)
- A single open-outcry trading session
- Monthly consensus among central banks
- Quarterly averaging of futures contracts
Correct answer: An electronic auction process twice daily
The LBMA Gold Price is set via an electronic auction administered by ICE Benchmark Administration, held twice per business day (AM and PM).
Question 4: Which factor would most directly cause gold prices to rise on the spot market?
- Increased geopolitical uncertainty and safe-haven demand (Correct answer)
- Rising interest rates and strong US dollar
- Declining consumer demand for jewelry
- Increased gold mining production globally
Correct answer: Increased geopolitical uncertainty and safe-haven demand
Gold is a traditional safe-haven asset; geopolitical crises drive investors to buy gold, pushing spot prices higher.
Question 5: A '750' stamp on a European gold piece is equivalent to which US karat marking?
- 18K (Correct answer)
- 14K
- 22K
- 10K
Correct answer: 18K
750 parts per thousand pure gold equals 75% purity, which corresponds to 18 karat gold (18/24 = 75%).
Question 6: When appraising a gold coin for insurance purposes, which value should the appraiser primarily report?
- Retail replacement value including numismatic premium (Correct answer)
- Melt value based on gold content only
- Wholesale dealer cost
- Auction hammer price from recent sales
Correct answer: Retail replacement value including numismatic premium
Insurance appraisals report retail replacement value, which for numismatic coins includes both the metal melt value and any collector premium.
Question 7: Silver tarnish is primarily caused by silver reacting with which substance in the environment?
- Hydrogen sulfide in the air (Correct answer)
- Oxygen forming silver oxide
- Carbon dioxide forming silver carbonate
- Moisture forming silver hydroxide
Correct answer: Hydrogen sulfide in the air
Silver tarnish is silver sulfide (Ag₂S), formed when silver reacts with trace hydrogen sulfide (H₂S) gases present in the atmosphere.
CGA Precious Metals & Market Valuation 3
Which precious metal is most commonly alloyed with gold to create white gold?