CGA Precious Metals & Market Valuation 5 — Questions and Answers
Question 1: Which acid solution is traditionally used to test gold karat by observing the reaction on a touchstone?
- Nitric acid at varying concentrations (Correct answer)
- Hydrochloric acid with copper sulfate
- Sulfuric acid diluted in water
- Aqua regia with zinc indicator
Correct answer: Nitric acid at varying concentrations
Gold testing acids are nitric acid solutions calibrated to specific concentrations that dissolve alloys below certain karats while leaving higher-karat gold unaffected.
Question 2: The 'bid-ask spread' in precious metals trading refers to:
- The difference between the buying price and selling price dealers quote (Correct answer)
- The daily range between opening and closing spot prices
- The premium over spot charged for minted coins vs. bars
- The fee structure for LBMA clearing members
Correct answer: The difference between the buying price and selling price dealers quote
The bid-ask spread is the margin between what a dealer will pay to buy metal (bid) and the higher price at which they will sell (ask).
Question 3: Sterling silver is defined as containing what minimum percentage of pure silver?
- 92.5% (Correct answer)
- 90.0%
- 95.0%
- 99.9%
Correct answer: 92.5%
Sterling silver must contain at least 92.5% pure silver (fineness 925), with the remainder typically copper for added durability.
Question 4: An appraiser notices that a gold chain loses significant weight after acid etching reveals a base-metal core. This practice is known as:
- Filled construction or hollow fill fraud (Correct answer)
- Rolled gold plating technique
- Electroforming with base substrate
- Depletion gilding
Correct answer: Filled construction or hollow fill fraud
Fraudulent filled construction involves a base-metal core coated with gold to misrepresent weight and value; acid etching can expose this deception.
Question 5: When silver prices fall sharply, what typically happens to the appraisal value of an antique sterling flatware set with strong historical provenance?
- The collectible premium may offset most of the decline in melt value (Correct answer)
- The value falls in direct proportion to the silver price drop
- The value increases as collectors seek inflation hedges
- The value is unaffected because antiques are appraised at cost
Correct answer: The collectible premium may offset most of the decline in melt value
For antiques with significant collectible or historical value, the premium above melt value can cushion or offset declines in raw metal spot prices.
Question 6: What is 'aqua regia' and why is it significant to precious metal testing?
- A mixture of nitric and hydrochloric acids that dissolves gold and platinum (Correct answer)
- A nitric acid solution calibrated to test 18K gold specifically
- A buffered sulfuric acid used to verify silver purity
- An electrochemical solution that plates gold onto touchstones
Correct answer: A mixture of nitric and hydrochloric acids that dissolves gold and platinum
Aqua regia (Latin: 'royal water') is a 3:1 mixture of hydrochloric and nitric acids—the only common acid solution that dissolves noble metals like gold and platinum.
Question 7: A gold piece marked '10K GF' means the item is:
- Gold-filled with a 10K gold layer mechanically bonded to a base metal (Correct answer)
- 10 karat solid gold with a filled pour casting
- 10K gold plated using electroforming
- Gold-finished to 10 karat surface equivalence
Correct answer: Gold-filled with a 10K gold layer mechanically bonded to a base metal
Gold-filled (GF) items have a layer of 10K gold mechanically bonded (pressure-welded) to a base metal core, representing a much thicker gold layer than plating.
CGA Precious Metals & Market Valuation 5
Which acid solution is traditionally used to test gold karat by observing the reaction on a touchstone?