With gold prices hovering around $1,200 to $1,400 per ounce, people are discovering that their broken, outdated, or unwanted gold in their jewelry boxes is worth 3 or 4 times what it was just a few years ago. In fact, while most consumer prices have remained stable and even decreased, gold is one of the few things that have experienced a dramatic increase. This increase is very welcomed in these troubled economic times. So if you need money, or you are just looking to take advantage of higher prices, there are a few things you should know:
How is gold priced?
You can find the market price for gold in most financial sections of your newspaper, the Wall Street Journal or on websites such as www.kitco.com or www.monex.com. The current price is on our main page too. Gold is priced per troy ounce, which is slightly different but close to the ounces on a postal scale that you may have around the house. There are 20 pennyweights (dwt) per ounce and since most jewelry items weigh a fraction of an ounce, most dealers and buyers use the pennyweight as the comparison unit. But you should remember: your jewelry is not pure gold. When you see a stamp that reads 10K gold, that refers to 41% pure gold. 14K gold is 58% pure, 18K is only 75% pure and so on. Also, the dealer you sell it to is entitled to a profit which will vary based on several factors, such as the dealers volume of business and the volume you are selling. Typically this margin could be in the range of 20% to 50% of the melt value of gold.
Shop Around
You may ask "How do I sell my gold?" Get quotes from several places before selling. Your jewelry may be worth more to someone who might be able to resell it as jewelry rather than someone who will melt everything he buys. Dealers will usually quote prices per pennyweight. Some dealers like to quote prices per gram because it sounds better. There are 1.555 grams per penny weight. (So $20 per penny weight equates to $12.86 per gram.) So if you get everyone to quote you a price per penny weight (or grams if you prefer) you can compare with some degree of knowledge.
Work with Someone You Trust
The Internet can be a valuable source of information not only for determining prices but also for finding willing and interested buyers. You might choose to sell to a company you like ore that is local but if you are armed with several quotes this will prevent dealers from taking advantage of you. With the advent of higher prices, many areas see the “vultures” swoop in to buy as much as they can in a weekend and are gone just as quickly. They tend to pay less because of higher overhead. (Those ads aren’t cheap! Neither is that mall space!) Also they never have to look you in the eye again.
Keep Control of Your Gold
Local dealers must abide by local laws designed to protect you. The “here today – gone tomorrow” crowd is not. For example if you change your mind for any reason – local jewelers must hold new purchases for 2 to 3 weeks and may be willing (but are not required to) sell your jewelry back to you at or near cost. Also just having the ability to say YES, NO or “Let’s Talk about it” is absolutely crucial to getting your best price. You can’t do that if you mail your gold to the “national” buyers. If you do want to mail your gold to a firm outside of the area be sure it is in an insured or registered package that you can track and be sure you can get your merchandise back if the price isn’t right. But never send anything to these places if you do not have the price comparisons that we mentioned previously. But there is usually no reason to send your gold out of town if you are armed with their best prices, many locals would be happy to match these prices, or at least be competitive.
How pure is my Gold?
Most gold jewelry is marked with 10K, 14k, or 18k purity on the clasp or on the inside of the band. Of course some marks are counterfeit and the buyer may wish to test it. Be sure you witness this test. This test is also used if karat marks are not visible. Many buyers will pay little to nothing if the marks are not visible, but a local buyer who will take the time to test it for you will probably pay you a fair price if he is satisfied with the test results. Just remember not everything that looks like gold is gold. A .925 mark means sterling sliver (even though it might be gold electroplated) and many Karat marks with G.F. after them or a fraction before indicate Gold Filled, which is worth very little. As is G.E. wich is Gold Electroplated.
Conclusion
Do your homework, compare prices, and if you have a large quantity don’t be afraid to negotiate. Do the math: 1) look up the gold price 2) Multiply by the purity 3) divide by 20 to get the price per pennyweight. That’s what your gold is worth on the market. IF PURE, you should get 60-80% of that price depending on quantity, resale ability, and dealer’s referring and carrying costs. And since most local buyers want and need the business they should be your best option.
Submitted by Joshua Trucks on Tue, 11/22/2011 - 15:22
