How to Get the Best Price for Your Gold, Again

December 1st, 2009 by James L. Sweaney, CGA, FGA. GG
Pure Gold Cuff Bracelet

Pure Gold Cuff Bracelet

Published originally, Oct. 2009- We feel this information is more pertinent and valuable with the recent spike in gold prices.

“Record prices for gold, near $1200 per ounce, have many people considering selling gold they own, so the question is how to get the best price. Before taking action, it's always wise to research and educate yourself.

The Consumer Reports Nov. 2009 issue, page 9, shows the results of their recent test of the gold buying market. They purchased identical 18K gold chains, each of which had about $70 worth of gold according to the market at the time of purchase. From last mid May to early July, they offered the chains to various gold buyers. Large “cash for gold” buying companies, like Cash4Gold, GoldKit, & GoldPaq paid the lowest, $7.60 to$20.59, 11 to 29% of the day's market price, while other venues (like your friendly local jeweler!) paid $25 to $50, 35 to 70% of the gold value.

Before you recycle your gold, be aware of these facts about gold.

  1. Gold from mines and recycling is refined into pure gold. Refiners use heat and chemicals to separate the gold from impurities and other metals into gold that is at least 99.95% pure.
  2. Pure gold is designated 24K, meaning 24 parts out of 24 are gold, i.e. 100% gold.
  3. The gold used to make jewelry, dental fillings, and most gold coins is called karat gold.
  4. Karat gold is pure gold alloyed with metals like copper and nickel to harden or color the gold.
  5. Karat gold jewelry, dental fillings, and most gold coins are not pure gold– they contain a percentage of gold and a percentage of alloys.
  6. The percentage of gold in the alloy is determined by dividing the karat mark by 24. 18K means 18/24 , i.e. 75% of the item is gold.
  7. Gold coins generally range from 22K to 20K– 91.7% to 83.3% gold. Some gold coins are 24K
  8. Karat gold items manufactured in the USA before 1981 were allowed a 1/2 karat tolerance, so 14K gold was actually 13.5K, etc. Plumb gold laws enacted in 1981 erased that tolerance.
  9. 18K gold generally contains 75% gold. 14K gold generally contains 58.5 % gold. 10K gold generally contains 41.7% gold.
  10. Quality pieces, period or antique jewelry may have more value than just gold value.

Before you sell, know how the market works.

  1. Gold is always bought and sold by weight.
  2. Gold is weighed in the Troy system, in which 1 troy oz. = 20 pennyweights=31.105 grams.
  3. Karat gold buyers pay you for the actual gold content by weight— they will weigh your gold and calculate the actual gold content.
  4. The gold market changes daily, so the value of your gold changes daily. The gold market is the price of one troy ounce of 24K gold, set (fixed) each morning and afternoon at the London gold market.
  5. Karat gold buyers usually pay for your gold at a percentage of that day's market value. Often, the more gold you sell at one time, the higher that percentage will be.
  6. It's generally best to get immediate payment. You can easily sell your gold to local jewelers, pawn shops, and gold buying companies or persons. They accumulate larger lots, then sell to gold refiners.
  7. Many gold refiners do not buy small amounts of gold from private individuals. Gold refining is labor intensive and expensive, so refiners often prefer to buy larger amounts from middlemen.
  8. Karat gold buyers must accumulate enough gold to offset their refining losses and costs. The refiner pays them for the actual gold recovered (usually ~98%) less the costs of refining.
  9. Some refiners take at least two days and as much as a week before they pay the seller. Gold buyers take the risk that the gold market will be lower when they sell it than when they buy it.
  10. Anyone who buys your gold is looking to make a profit– they try to sell it for more than they paid for it. But keep in mind, buyers must invest capital, bear risk, and pay refining and other costs.

So the question is really “What is a fair price for your gold?”  In this writers opinion, a fair price is one that gives you reasonable value for your gold and allows the buyer a fair return on investment. We've always believed in the golden rule, treat others like you'd like to be treated, so 50/50 seems about right for starters. For bigger lots, you should get a bigger piece of the pie.

Mardon Jewelers buys gold to recycle and uses recycled Harmony gold in the products we make. We are always happy to purchase your gold for recycling–just stop by the shop– we'll weigh and value it for you at no charge. If you know the weight and karat of your gold, use our new Gold Value Calculator to get today's value in real time.”

Mardon Jewelers also buys estate jewelry and diamonds.

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