Before I start I want you to know what an uproar this article has caused.  I get emails about it all the time. The emails run 50 positive to every 1 negative email.  The positive emails are usually from the buyers of nuggets, and the negative ones are from unethical sellers of nuggets.  But I have also gotten several very nice letters from some of the bigger ethical gold nugget sellers on Ebay.  In fact one of the biggest sellers asked if he could use this article. 

The purpose of this article is to give new gold nugget buyers at least a basic understanding of buying gold, and enough knowledge to hopefully avoid some of the pitfalls.  The biggest complaint I've heard from some disappointed folks who have bought nuggets, has been that they thought the nugget they were buying was much bigger.  The problem occurred because of the picture; and the seller provided no standard of measurement, either by weight or something to gauge the size like a ruler or a point of reference like an object of known size; like a nugget laying next to a dime.  Sellers should be honest and forthright about what it is that they are selling, and Buyers should feel comfortable that the seller has given them enough information to make an informed buying decision.  So with that being said, I hope you will have a better understanding of the purpose and intent of this article.

I know a lot of you are educated gold nugget buyers, and this is not directed towards you. However, there may be some people who are new to buying gold nuggets and I see a lot of bidders on Ebay who are setting themselves up for disappointment, to my way of thinking.

I'd like someone to explain to me the consumer mentality that is operating on Ebay when people are buying nuggets and paying what amounts to $1,500 an ounce for a piece of gold that is not even a REAL Natural NUGGET!  A REAL NUGGET is one that has been made by Mother Nature!  There have been nuggets sold on Ebay where if people had read the fine print carefully they would have seen that the nugget was man made.

First, the price for smaller nuggets 1 to 2 grams usually runs around 10% to 40% over spot gold price. Larger Nuggets 3 to 5 grams around 20% to 50% over spot gold price. Real Large nuggets 6 to 7 grams, 30% to 50% over spot gold price. Really Large nuggets 8 grams up to 16 grams 30% to 60% over spot gold price. Over 16 grams and the really really large nuggets 1 ounce or more well these are extremely rare and it's sort of a "what ever the traffic will bear" type of situation.  REAL Gold nuggets are like diamonds, the bigger they are the more rare they are.  Now granted, these prices can fluctuate, depending upon the aesthetic appeal of the nugget. Some are very pretty, others are as ugly as a baby vulture.  A 1 gram ugly may go for $40 a gram, the 1 gram jewelry grade nugget may go for as much as $100 per gram.  And let's not forget, everyone has different tastes.  Some folks like the smooth river worn looking nuggets, others like nuggets that are more rough and jagged, still other folks like nuggets with quartz or ironstone in them.

Some folks just like to collect different types of nuggets.  No matter what you pay, as long as you like the nugget, and you feel good about the price, and the seller has given you enough honest information for you to make an informed decision, then you have invested in a rare piece of what God and Mother Nature have created.

Sometimes people are willing to pay a little more for a particular shape or type of nugget because that's precisely what they have been looking for.  I heard a story of someone who paid handsomely for a nugget because it was shaped like the letter "L" and that was the initial of his family's last name.

I don't have a problem with anyone paying whatever they feel comfortable paying for a nugget, no matter the price.  The problem I have is when the person buying the nugget has an expectation that they are getting something much different than that which arrives in the mail after the sale is complete.

When nuggets are advertised without a weight or measurements, or standard of reference for size you have nothing to go on but to guess from the picture.  Imagine how disappointed you would feel if you had won the bid on a nugget that appeared to be the size of a penny, and when it came in the mail it was the size of a kitchen match head.

There are approx. 31 grams in a troy ounce of gold. I see people advertising, "HUGE gold nugget" on Ebay and then I look at the ad to see that these are 1 gram nuggets. A 1 gram nugget IS NOT a HUGE nugget! It may be huge compared to a flake of gold, but where nuggets are concerned a 1 gram nugget is pretty run of the mill.  A 1 gram nugget is a little bigger than the size of a kitchen match head. These 1 gram nuggets are bidding out at sometimes very high prices. Which is fine as long as the buyer knows exactly what he or she is buying.  But remember a 1 gram nugget is ONLY .032 of an ounce. A more recent trend on ebay is seller selling nuggets that are less than 1 grain in weight. There are 15.54 grains in one gram, so a 1 grain nuggets is ONLY .002 of an ounce

I think a lot of folks are getting boon swoggled into buying what they think is a big piece of gold only to find out when it arrives that it's just a little bigger than a flattened BB. This is going to turn people off to buying gold nuggets on Ebay and legitimate gold prospectors/dealers like myself will be hurt in the process.

Then there are those people on Ebay that advertise HUGE REAL GOLD NUGGET, and don't even give a weight! And again, sometimes I can get a sense that these nuggets are not even a gram and sometimes they bid out at prices so high that it leads me to believe the bidders must think the nugget is a good size chunk. Or some sellers don't give a weight but show the nugget next to a ruler, but you can only see one number on the ruler and the graduations. 

Below is a nugget, that I've taken a picture of with a macro lens that makes it look enormous and it's laying next to the number 4 on the ruler with graduation marks.  Well these close up shots make the graduations look like 1/4 inch marks, but they're not!  They are 1/8 inch marks.  Without seeing at least two numbers on a ruler, you have no idea of what value to place on the graduation marks!   And nuggets are not sold by dimension, they are usually sold by weight.  Dimensions are fine in addition to weight but probably a better way to judge a nugget is to have it pictured next to something familiar; like a nugget next to a dime, or a nugget held in someone's hand.

Here's the picture I took of one of those HUGE nuggets that weighs 1 gram presented in a rather deceptive manner.  Well how big is this nugget really?  Look at the next picture where I'm holding the nugget in my hand next to a dime.

nugrul.jpg (92868 bytes)

Does this next picture give you a better idea of the REAL SIZE of a 1 gram nugget?

nughnd.jpg (69559 bytes)

This is one of my 1 gram real natural nuggets and it is jewelry grade, but you couldn't make a pendant out of it.  Maybe you could make a stickpin, a tie tack, or one stud earring.  I may be prejudice, being that it is a nugget I found, but I think it's pretty.  It has a unique shape and a lot of interesting natural design giving it character.  I'd probably pay between 50% to 100% over spot gold price for this nugget.

BUT!  Add a 14k gold stick with a clutch, and a 5 point real diamond and WHAM!   A beautiful stick pin appraised value would be much higher.

stick.jpg (20689 bytes)

Then we have the third type of advertiser that promotes his gold nugget as 33 grns. GRNS is the abbreviation for GRAINS not grams! There are 480 grains in an ounce.  A GRAIN is only .0648 of a GRAM, or .0021 of an ounce. And yet people are snapping these things up at bid prices that flip my stomach.


The advertiser is advertising that the weight is in "GRNS."  It is up to you as the consumer to know that GRNS means Grains not Grams and to know exactly what you are buying and how much you are paying for it.  If you understand the difference between Grains and Grams and you want to pay what amounts to an excessive price for a man made nugget then that is your privilege.

When it comes to buying gold on Ebay the old Latin saying "Caveat emptor", (Buyer beware!) takes on special significance.

So what's the difference between a jewelry grade nugget and a baby vulture nugget?  Well I've already shown you a pretty little 1 gram jewelry grade nugget made into a stick pin, (by the way my wife snatched that stick pin right away from me so I never got a chance to put it on Ebay), but here's a nugget I consider an ugly!

Well here's a .6 gram baby vulture:

vulture.jpg (45261 bytes)

Personally I don't like this nugget.  I don't like its color, I don't like it's shape.  In my opinion it's butt ugly!

Beauty or Beast? How about this 1.5 gram Australian nugget
containing laterite, an iron type substance?

laterite.jpg (52604 bytes)

Well, beauty is in the eye of the beholder I guess, and I like this nugget!  It's unique!  Beautiful color and interesting design.   The laterite adds a striking contrast.  It almost looks like Onyx.  It might make an interesting tie tack.

QUARTZ GOLD SPECIMENS

And what about quartz gold specimens?  Quartz and gold specimens are very rare.  They are worth as much and most of the time more than pure gold because of their rarity.  Why are they rare?  Because most nuggets have already fallen out of the host quartz.  Gold and iron are usually found together in veins in the cracks and fissures of quartz.  As the iron oxidizes or rusts, it causes the quartz to fall apart and liberate the gold held inside.

Here are a couple of pieces from my personal collection.  The first is from Whitehills Arizona.  It weighs 4.2 grams and is about 1/2 inch by 1/2 inch.  The gold is attached to very rusty quartz. Remember, iron is the mother of gold!  This was given to me by a very good friend and prospecting partner of mine, John Green.  I guess I carried on so long about how unique this piece was he figured giving it to me was the only way to shut me up.  This type of specimen is generally considered to have been formed by extremely high pressure and temperatures and steam.  White Hills has a large dormant volcano right in the middle of the gold producing area.  The high pressure and temperature melted and forced the gold to the surface but the steam prevented in from forming into a vein.  Instead, it has a gold matrix formation throughout the quartz.  Notice the small quartz crystal formations at the top of the specimen. It was as if the molten gold was blasted into the quartz under high pressure.

The second is from Greg's Reef in Australia.  It was given to me by a good Aussie friend and professional prospector, Dave Langley.  It is pure white quartz, with a vein of pure gold sticking out of it.  This is an extremely rare piece as there is no iron rust staining.  This piece weighs in at 5.5 grams.

Prices?  Well, these really are collectors items.  You may be competing with museums, and/or universities who buy such pieces for their displays.  The more unique the piece, and unusual the structure, the more valuable.  The first piece could sell for upwards of around $400, the second, $600.   It is really a sellers market when it comes to specimens.

aspecie.jpg (60979 bytes)
qspecie.jpg (53343 bytes)
specy.1.jpg (8215 bytes)
4.2 grams
5.5 grams
Museum Grade
18 grams

The third piece is also from Australia and found by another good Aussie Mate of Mine, Chris Hake from Kalgoorlie, WA.   This is really a museum quality piece.  It's a beautiful example of quartz with gold just dripping all over it.

REAL, Natural Gold Nuggets (nuggets dug out of the ground), are in fact a rare commodity. It's estimated that only 3%  to 5% of the world's gold is found in nugget form. And the larger the nugget, the more rare they are; just like diamonds. I've heard that a 1 ounce nugget is as rare as a 5 carat diamond.   And REAL NUGGETS, sell for more than spot gold, especially if they are jewelry grade. BUT buyers still deserve to have a good solid idea of exactly what it is that they are buying; so if you are in doubt, ask the seller.

Here's a conversion chart to help everyone figure out just what they are getting. Don't buy from people that don't tell you the weight, and be careful of whether the ad is advertising a nugget in grains or grams and whether it is a REAL NATURAL GOLD nugget, (a natural nugget, one dug from the ground), or a REAL GOLD nugget; a nugget someone made from real gold. A REAL NATURAL NUGGET, one that is made by Mother Nature and dug from the ground, is more valuable.

Gold - Weight Conversion Chart

 
GRAIN

GRAM

DWT TROY

OZ.
TROY

OZ.
AV

GRAIN
1.0000 0.0648 0.0417 0.0021 0.0023
GRAM
15.4324 1.0000 0.6430 0.0321 0.0353
DWT TROY
24.0000 1.5552 1.0000 0.0500 0.0549
OUNCE TROY
480.0000 31.1035 20.0000 1.0000 1.0971
OUNCE AV.
437.5000 28.3495

18.2292

0.9115 1.0000

Accuracy: Rounded-off to 4 decimal places.

DWT = Penny Weight.  This is a convenient way to size nuggets because 20 pennyweights equal 1 ounce.  So, 5 dwt (penny weight) is a 1/4 ounce, 10 dwt is a 1/2 ounce etc.

However grams seems to be the most widely used weight measurement.  So keep in mind that there are 31 grams to the ounce, so a 8 gram nugget is a little over a 1/4 ounce, a 16 gram nugget is over a 1/2 ounce, etc.

Thanks!
Doc

1999 G.M. Lousignont, Ph.D.
all right reserved


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