The United Kingdom’s recent announcement that it’s leaving the European Union has added to economic uncertainty but helped drive the price of gold and other precious metals up to new heights.
On July 6, gold prices soared to more than $1,350 an ounce—its highest amount in 28 months. Is it time to sell your gold? Here’s what to know before you do. Gold price information courtesy of sputniknews.com.
What kind of gold sells?
The kind of gold you can sell ranges from inexpensive gold trinkets to solid gold coins to fine jewelry and even dental gold. A jeweler, pawn broker, gold refiner, or scrap gold dealer will buy the gold at a price based on the weight of its gold content, minus a handling fee. The purer the gold content, the more it’s worth.
When assessing your jewelry, consider the condition of your gold pieces, and if other people would be interested in buying and wearing it. The better condition yours is in, the more likely it will sell for a good price. If a valuable piece looks too worn, consider selling it for the gold and silver it contains.
Make sure the buyer is legit.
If you’re thinking about selling your gold jewelry, the first and most important thing to do is to make sure the potential buyer is legitimate. A Google search for “sell my gold,” or something similar, returns thousands of hits. Almost every jewelry store, pawn shop, and flea market in the country is now buying gold, not to mention online buyers, and many are unlicensed and uncertified.
Like any business, the reputation of pawn shops and jewelry stores differ from shop to shop. Some are more professional and offer better prices than others.
Research multiple companies beforehand—ask plenty of questions and find out if they are a member of the National Pawnbrokers Association. Unless you know for certain that a company is legit, we recommend you don’t mail your jewelry out of town or to an unknown source, as you may never see it again.
Instead, take your pieces to two or three local buyers and get them appraised. Make sure the shop is a member of the National Pawnbrokers Association, and its appraisers are certified by the Gemological Institute of America (GIA).
If you have multiple pieces, you may want to get individual offers on each piece as one buyer may be willing to pay more for some items than others. Make sure you agree to the appraisal estimate and terms and conditions of the sale before agreeing.
Beware of scams.
While many jewelry buyers are legitimate, many more are not, especially if they only do business online. One of the most common online scams is when a company asks a seller to mail their valuables to them for an appraisal offer. The seller often ends up with nothing; either the buyer claims they never received the piece, or, after making an offer, they never return the piece and claim it was lost in the mail.
A second type of scam is when a buyer offers a price far below what the piece is worth. While this is an unfair business practice, it’s really the fault of the seller if they agree to the offer. That is why it’s so important to have an idea what your piece is worth new, as well as what it goes for in its existing condition.
Another gold buying scenario to be aware of is known as gold buying parties. These are gatherings or parties organized by a local sponsor. The sponsor invites their friends and family over to their house, where a “gold buyer” will appraise the guest’s pieces and offer appraisals and cash on the spot. These buyers often pay far under what the pieces are worth, which is how they make a profit. The sponsors also usually get a cut of the sales. Again, know what your pieces are worth and understand what the arrangement is between the sponsor and buyer.
Understand how gold is valued.
The purity of gold jewelry is indicated by its karat stamp. Most gold jewelry, especially antique pieces, are 14-karat, which means they are only about 58 percent pure and you will only receive about half its current gold value. A 24-karat gold piece is pure gold and will be worth approximately the current price of gold per ounce.
Generally, the gold content of any piece of jewelry—indicated in karats—will be marked on it somewhere such as the inside of a ring or bracelet, on the clip of a necklace, or the back of an earring. For example, a 14-karat piece of gold jewelry will have “14 karat” inscribed on it, or the numbers “585” (which is the numeric identification for 14-karat gold) or “14K.” Be aware, however, that sometimes pieces are stamped even if they’re not real gold.
If there’s no karat stamp on the gold piece, it’s usually because it’s not real gold. In some instances, the karat stamp may have worn off. A quick way to test if a gold piece is real is to place it next to a magnet; if it sticks, then it’s not real gold.
Know your gold’s weight.
Whether you weigh it yourself or take it to an appraiser, make sure you know how much your gold weighs. Note that gold, silver, and other precious metals are measured in troy ounces (equal to 31.1034768 grams). Certain jewelers also use the term “pennyweight” when referring to precious metal, and a troy ounce equals 20 pennyweights.
Bring it to an appraiser.
To truly know your gold’s value, take it to a reputable jeweler to have it appraised, especially if it’s an heirloom. This will ensure that your piece will be appraised for its craftsmanship as well as its gold purity and weight. A reputable jeweler will also explain how your gold is weighed, and how you will be paid (dollar amount per gram, troy ounce or pennyweight) and explain the purity level of your gold.
Start with scraps of gold from broken jewelry pieces before you sell a more valuable item. That way you can personally gauge your reaction to the buyer, whether you felt that they treated you fairly and were trustworthy, and whether you should deal with them in the future with your better pieces.
Realize the market fluctuates.
The price of gold and silver changes daily based on various factors, including market demand, manufacturing supply, and the financial markets. It’s important to understand that the price you are quoted for a piece applies to the day that the piece is appraised and is based on the market value in the industry at that time.