Gaye’s husband (Survival Hubby) has been a professional in the fine jewelry business for over 50 years. In a past life he also worked for a refinery. So while not professing to be an expert, over the years, many of his tips for dealing with the sale of old gold (jewelry, coins, dental work and such) have rubbed off on Gaye.
Today she offers some sound advice to those of you that may want to raise some cash by selling off your old jewelry, gold and silver items.
A Lesson On Gold
What is the best way to sell old gold that you have lying around the house? Let us begin first a short lesson on gold.
Gold that needs to be melted down for resell is referred to as scrap gold. Scrap gold comes in many flavors based upon its purity. Virtually all gold jewelry will be rated in Karats, or K. The most common Karat breakdowns and the associated purity are:
10K 40% gold
14K 58½% gold
18K 75% gold
24K 100% gold (actually 99.9%)
There are other Karats (9K , 22K) but those listed above are the most common.
The price of gold varies from hour to hour, day to day, year to year. For example, as I write this, the price of gold (we are talking about 24K or 100% pure gold) is $1,594.70 per ounce. This is called the “spot gold price”. The spot gold price is based on the price of “futures” contracts traded on “futures exchanges” operating in a number of countries. It is easy to check the current retail value of gold at www.kitco.com.
Okay, so much for the lesson.
Getting the Most for Your Old Gold
Here are some tips for getting the most for your old gold.
1. Determine what you have and what it is worth – approximately. The purpose of this exercise is to make sure you are not grossly ripped off. Weigh your stuff up in advance to determine how much gold you have in ounces. This can be difficult if there are stones (diamonds and other precious or semi-precious gems) involved. But for all intents and purposes, they do not add much weight. That said, you can purchase an inexpensive scale
Now that you have the weight, do a best guess on the Karats. The K may be marked and it may not. Even if marked, it might not be accurate so like I said, do a best guess. Better yet, purchase an inexpensive gold testing kit so that you know for sure. These kits use a scratching stone to scrape off a tiny bit of the metal so that you can test the shaving with a chemical acid.
Next, you will want to get the current value of your gold or precious metal from www.kitco.com. Get out your calculator and for gold, make the following the calculation:
weight in ounces x spot gold rate x gold purity = value
Remember, this is just a guess at this point. It will only take a few minutes and will come in handy later when you are sitting across the table from your gold dealer.
2. Find a dealer that buys old gold. This is easier than you think.
Look for a local rare coin dealer in your home town. They will almost always be able to weigh your gold and give you a quote on its scrap purchase value.
Also look for a jewelry store that advertises that they buy gold. This is a good option if your gold includes valuable diamonds or gemstones since most (but not all) scrap buyers do not have the knowledge to pay you for your gems.
Word of mouth. As the price of gold has escalated, a number of honest independent dealers have sprung up in communities of all sizes. Ask around at church. Ask your neighbors. You may even find someone local in that is advertising in your Little Nickel classifieds. These independent dealers offer cash on the spot, and will often provide you with the highest return. BUT, be careful and check out his or her credentials first. Some independent dealers know almost nothing about gold or precious metals. Make sure you are dealing with someone who has experience in the jewelry, coin, or refining industry. And don’t be swayed by smooth talkers,.
Pawnshops. Not the preferred choice but still an option. Keep in mind that pawnshops like to buy low so you will not get top dollar here.
3. Meet your gold dealer in a public place. Do not call invite someone in to your home to buy gold. Meet in a very public place. A bank lobby is ideal but even a hotel lobby is good. Of course, an established retail location is also good. Your dealer will test the gold to verify its purity. This may involved chemicals or specialized research will come in handy. If there is a huge deviance in the weight, ask questions.
4. Accept cash and only cash. Unless you personally know your buyer or you are dealing with a long established, reputable dealer in your home town., cash is the only way to go.
5. Never ever put your precious gold in a baggie and mail it off to someone or someplace unknown. You see the ads everywhere: in the mail, on TV, in print ads, and on the web. Go ahead and Google these guys along with the word “scam”. These mail-in joints will pay you 10% of spot, if anything.
6. If you are in the market for a new piece of jewelry, consider using your scrap gold as a trade-in. According to SH (SurvivalHusband), most jewelers will give you a generous trade in on the purchase of a new bauble for yourself or a loved one. One caveat: watches don’t count. The margins are too thin so if you are considering the trade-in route, think ring, bracelet, brooch or necklace.
7. Manage your expectations. You can realistically expect a return of 50% to 60% depending on where you live. Pawnshops typically are on the low end, independent dealers on the higher end. YMMV.
8. Beware of a dealer telling you he will melt your gold and return it to you in ingot form. If this happens, RUN FOR THE HILLS. Only a refinery can assay and melt down the gold properly. And a refinery will probably not be interested in the quantities you have on hand to scrap.
Summing it all up
None of us has a crystal ball so predicting that gold will move to $5,000 per ounce is anyone’s guess. In my view, now would be a good time to cash in that old jewelry under the following circumstances:
You do not have a three month supply of food and water that can be used in a crisis (economic, man made, natural disaster). Use the money to stock up!
You have current credit card or other consumer debt that can be paid down with the proceeds
That said, if you want to keep some gold as a hedge against inflation, currency failure or other economic disaster, use your newly found cash to purchase gold coins such as the American Eagle, South African Krugerrands, and Canadian Maple Leafs. These can be purchased from a coin dealer who will likely take your scrap gold in on trade. These coins are highly marketable and will continue to be a valuable commodity if disaster strikes.
And then of course, there is the possibility that in two years, the spot gold price will be $5,000 an ounce and you will be sitting on a stash of gold coins. Lucky you.
Hang on and enjoy the ride,
The Two G’s – George & Gaye
Check this out . . .
Working to Death
Advice for Bagging Yourself a Survival Kit
Solving the Portable Knowledge Problem
Spotlight items: Have some old gold or jewelry you want to sell? Here are a few items you will find useful.
Gold Testing Kit: This is the same kit – with the same chemicals – that the professionals use. With these chemicals and the included stone, you can test 10k, 14k ,18k ,22K, platinum, and silver. Be sure to wear latex or nitrile gloves, please. These acids will stain your fingers!
Jeweler’s Loupe: You don’t need to spend a bundle in a jeweler’s loupe. This model is less than $3 with free shipping. It provides 30X magnification and has a glass lens.
Shop Amazon And Save Up to 40% on Kershaw Knives
Our favorite Kershaw OSO Sweet Knife is currently on sale for an amazing $19.08 (although prices on Amazon do change daily if not hourly.) This “oh so sweet” knife is solidly built, stainless steel knife that comes razor sharp right out of the package. It will pretty much cut through anything the price is amazing.
Mountain House Sale: For the month of June, Emergency Essentials will be offering all Mountain House products at a discount of 20% to 25%. Shipping cost is $6, $9, or $12 depending on the size of your order and never more. (And you know how heavy food items can be.) Be sure to check out the Freeze-Dried Mountain House Pouches which offer a great way to sample the various food items before investing in the larger #10 tins.
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How to Sell Gold and Old Jewelry without Getting Ripped Off is another awesome article brought to you by George and Gaye at Strategic Living.