How to sell unwanted gold jewelry
Buying unwanted gold is big business. With the record breaking prices in recent years, a new gold rush has inspired a community of modern day treasure hunters eager to strike it rich in today’s gold frenzy. Weeding out the real experts among the flock of gold buyers can be tricky
Here’s a simple guide and tips to help navigate the muddy waters of selling unwanted gold jewelry:
How gold value is determined
Three variables affect the amount a seller might get for scrap gold: 1. The item’s gold purity (karat), 2. Its weight (gold is sold in troy ounces, also measured in grams or pennyweights), and 3. Gold’s daily spot price on the stock market.
Pure gold (24K) is bright yellow and very soft. Often, other metals are blended in to give it hardness and color variation. This accounts for the different karat stamps (such as 10K or 14K) found on some jewelry.
A piece of jewelry’s purity is determined by testing processes such as an acid/scratch test, electronic tester, or X-ray fluorescence scan. It's not enough to go by the karat stamp, as fraud has become more common in the current gold rush.
Once the purity is known, a jeweler weighs the piece of jewelry, then calculates its per-gram value against the current market price of gold.
For example, you have a gold chain that is 14K gold. That means, 58.3 percent of the chain is pure gold. It weighs 90 grams. 58 percent of 90 grams is 52.2 grams of pure gold in the chain. There are 31.1 grams in an ounce of pure gold. Therefore, This chain is 1.68 ounces (52.2 divided by 31.1).
At the time this article was written, gold was valued at $1,276 per ounce. So the value of the pure gold in the chain used in the above example was $2,141.
How much money can you expect for selling your gold?
Two variables in the gold purchasing formula never change: the karat and weight. But the daily spot gold price can fluctuate by the hour. And the price any jeweler is willing to pay varies widely, as they balance their profit margin.
Gold buyers are not bound by any restrictions when it comes to buying scrap gold. They can give you 100 percent of that day’s gold value and make nothing, or they can give you 10 percent of the day’s value and hope to make 90 percent when they sell it. An established, reputable jeweler will generally pay at least 50 percent of the daily spot gold price.
What happens to the gold and any precious stones?
A jeweler or gold buyer collects gold and sells it to a refinery, which often pays over 90 percent of market value. Scrap gold is then melted down and sent on to other, larger, refineries. Stones, however, are not sent to refineries. So, it is good to ask about them when discussing your jewelry with a gold buyer.
If your jewelry has stones, you will need to pay close attention. This step will separate the experts from the amateurs. The experts have a way of estimating, to a fairly accurate degree, the weight of the stones without removing them.
This means you will get a more true value of both the stones and the gold. If the stones are valuable, the jeweler should inform you of their worth, and discuss your options for keeping them. The amateurs will often guess at the weight and value of the stones, and many won’t even make getting them back an option.
A reputable jeweler will offer to remove any stones from pieces you are selling and return them to you, though there is often a price for having this work done. Some stones will be too small or chipped to be of any value, but a trustworthy jeweler will explain this to you and offer to return any stones of significance.
Even a large diamond will only have a small effect on the overall weight of a piece of gold jewelry. Don't accept being told, therefore, that stones make up the majority of the weight, thereby reducing the amount of gold value.
Where do I take my jewelry to sell?
The real question everyone wants to know is, “Who will give me the most for my unwanted jewelry?” The best advice is to check with your local area jewelers and get a few offers. Here are some tips when choosing a gold buyer:
1. Choose a reputable jeweler. Look for someone who has been in your community for a long time – they have a reputation to protect.
2. Check consumer reviews. Sites like Angie’s List, Yelp!, Facebook and Google are good places to start.
3. Make sure they’re permanent. Always sell your gold to a place with a fixed address. Visit the location to be sure, don't just call.
4. Consider what you plan to sell. If you have a unusual gold coin, for example, it is possible that the coin is worth more than its gold content. Consult a coin dealer in this case. The same holds true for antiques.
5. Ask plenty of questions. Make sure you feel they are being transparent about how they determine the value of your jewelry, and what they do about any stones that might be in it.
6. Think green. You may prefer to choose a jeweler who sometimes elects to re-use the gold they purchase. This has a reduced impact on the environment.