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PAF is an abbreviation for "Price Adjustment Factor". This Factor is used to adjust the price of Gold and Silver jewelry as the commodity price of an ounce of gold or silver fluctuates up & down.
What makes the market move up and down?
Many factors affect the price of precious metals. The major factors include: political turmoil/unrest, Central Bank reserve building (support/protection of a country's currency) and new demand for Gold and Silver as a raw material (cell phone, airbag systems, computer key boards, increasing prosperity in India, China, and the Middle East).
How is the PAF determined?
There are three key components used to determine an individual product's PAF. They are Metal Purity, Product Weight and the Market Price of Gold/Silver.
Product Weight Precious metals are measures in Troy Ounces. A Troy ounce is equivalent to just over one (1) ordinary ounce:
1 Troy ounce = 1.097 ordinary ounces
A Troy ounce is further divided into 20 Pennyweight. Pennyweight is the most common unit of measure for precious metal products
Metal Purity Gold purity is measure in "karats". 24 karats represent pure (100%) gold. The following chart compares the most common karat qualities to the percentage of pure gold they contain.
Karats Percent
(parts of gold per 24) (parts of gold per 100)
The PAF is used to re-price, up or down, the precious metal content (purity & product weight) of a jewelry product that has had a price change based on the free market price of the commodity (gold, silver, platinum, etc.).
