If you have been looking for a gold piece to buy, you would have quickly realized that gold nuggets are worth more than Bullions or gold bars. It does not happen by chance, and some intrinsic characteristics of gold nuggets make them extremely valuable. This might also be the best motivator to start planning your next prospecting trip!
The Value of Gold Nuggets vs. Bullion
As with any goods in a free market, the price of gold nuggets is dictated by the rule of supply and demand. And as you might have guessed, gold nuggets are rare. In fact, so rare that they only account for 2% of the total amount of gold discovered every year.
Another factor that adds to their rarity is that most nuggets historically have been melted down to form bullion. The desire among collectors and prospectors for natural, rough nuggets is a newfound one, stretching back only a couple of decades. As a result, some of the biggest nuggets ever found, including the welcome stranger nugget, were melted down shortly after discovery! Today, collectors are ready to pay a hefty premium would they happen to stumble across a gold nugget of the right size and shape.
Factors That Influence the Value of Gold Nuggets
The main reason for gold nuggets to be worth more than gold bars is their provenance and recovery method. However, each gold nugget is also priced differently. While considering its weight when calculating its market price, the seller can add or remove value depending on several aspects of the nugget.
Generally, the only two factors influencing a GOLD BAR is its weight and the current spot price. Indeed, its purity can range between 99.5% to 99.9%, which in itself only affects the price to a limited extent.
Spot Price
The current spot price of gold can affect the price of gold nuggets. Gold is usually measured in Troy ounces, but many sellers might display the weight of a nugget in grams or ounces. Therefore, it is recommendable to clarify what unit of measure a certain value refers to before purchase.
You can easily calculate the value per gram or Troy ounce by multiplying its weight by the spot price. However, this formula might not give you the exact cost of your nugget, as the other factors below can influence it.
Purity and Specimen
When pricing a gold bar, a seller will take into consideration the purity of the ingot. With gold nuggets, the purity is seldom taken into consideration as long as the gold nugget appears to be of ordinary purity. However, it should be noted that the luster of a gold piece tends to increase with higher purities, which could make a nugget worth more to a potential buyer.
Gold specimensare gold nuggets that still present some sediments of the host rock still attached to it. This could be a rusty metal or other, more appealing elements. In particular, some gold nuggets still boast pieces of quartz that have not yet been eroded from the specimen. Depending on what the buyer is looking for, such samples can be worth more than same-size nuggets without other elements.
Size of Nugget
Of course, the size of the nugget will influence its cost. The larger a nugget is, the rarer it will be, the higher will be priced. Indeed, large gold nuggets are among the most precious specimens a prospector could retrieve. Indeed, with enough time, these will be eroded down to smaller pieces of gold flakes if left in nature.
Shape of Nugget
Unlike gold bars, the shape and look of the nugget are among the most influential factors that can cause its price to rise. Indeed, the most interested gold nuggets buyers are collectors that will evaluate the specimen on its unique look, aside from its size.
Gold nuggets that boast an aesthetically appealing crystalline structure will be worth much more than a larger nugget without those features. Below is an image of a gold nugget with a crystalline structure that would command a high price.
On the opposite end of the spectrum, we find round and polished gold nuggets. These are among the most common gold nuggets, and will therefore not command as high a premium. However, they are often still sold above spot price.
Conclusion
Gold nuggets are worth more than gold bars because they are rarer and unique. However, determining the price of a nugget can be tricky, and often the value changes depending on what the gold buyer and seller agree upon.
Since the price calculations take into consideration its appearance, it is easy for the prospector to add a subjective value to a specimen. However, size, provenance, and pieces of the host rock still attached to it can increase its market price.
