Cash for Gold. By now most everyone has heard of this. And while much has been written on the subject, I must add my thoughts as well. The first time I saw the commercial, 'what a scam' was my immediate thought. These kind of things always come out when times get tough, or more specifically, when gold prices shoot up. There are a lot of people who have old trinkets sitting in a drawer or a jewelry box. And anything with precious metal content (platinum, gold, or silver), has some value. Sometimes it is only the value of the metal, and other times it could have some intrinsic or collectible value.
As far as metal value goes, this is a fairly simple thing to calculate. Gold quality is designated by karat content. 24 karat gold is pure gold, and the market price of gold is for pure, 24 karat gold. In the US, most gold is 14 karat, or 14k, which is 14 parts of pure gold, and 10 parts alloy or other metals, (to add up to 24), which can be silver, copper, zinc, nickel, or palladium. There can be others, but these are the main ones. These other metals also have market price values, but tend to be far less than the gold price, so they are generally not considered when valuing scrap gold. Karat can also be listed as a percentage, such as .750 or 75% for 18 karat, and .585 or 58.5% for 14 karat. This is the percentage of fine gold in the piece. Knowing this makes it fairly simple to calculate the approximate value of the scrap. Using simple numbers, if your gold is 14 karat and weighs 10 grams, then it has about 5.85 grams of pure gold. If the market price for gold is $1,000 an ounce, then the value of 5.85 grams would be about $188.
This does not mean that you would get $188 for this gold, as there are other factors involved in the buying and selling of gold. When you buy a US gold coin for example, you pay a premium over the market price for gold. This could be anywhere from 5% to 15%. And consequently when you sell the coin, you will be paid less than the current market price. This allows a dealer to make a small percentage profit when he resells the coin to someone else. When a dealer buys scrap gold, there are other factors that need to be considered. The piece might be marked 14k, but it might be 13k. Anyone can stamp anything on anything. Although there are gold stamping laws, there is no regulation, and so there is a lot of deception. A lot of times the piece is not stamped, or the stamp has worn off. In either case, only an approximation of the actual karat can be obtained. Then there is the expense of refining. There is a charge to refine, or extract or separate the metals. Then, the refinery keeps a small percentage of the recovered metal, which means less for the dealer.
A dealer can be a coin dealer, pawn shop, jeweler, or scrap buyer. Who pays the most? The better question is "who do you trust the most?" Your local dealer will most definitely pay more than someone who all of a sudden popped up on TV, and tells you to trust them. Do you know who they are? Have you been to their business office? Did they give you an address or a P.O. box? How long have they been in business? Can you find out, on your own, the answers to these questions? Because the guy on the commercial can say anything, and needs to prove nothing. He is counting on you to trust him just because he is on TV. And why would you trust someone you don't know, or can't visit? Your local jeweler has probably been in business for many years, and is part of the community. And by local jeweler, I mean your independent, family owned jeweler. NOT a mall or chain store. (I will save this topic for another day). Your local jeweler can give you the best price, because it is in his best interest to treat you fairly. Because you may be selling today, but you could be buying tomorrow.
My advise is to shop around. It would not take much effort to get a good price for your unwanted gold. But PLEASE do not send it to someone you do not know. The minute you put it in an envelope, and mail it off to who knows where, you lose all control. You become at the mercy of people whose only job is to pay you as little as possible for your valuables. And have you heard about the store in the Mall of America that just buys scrap gold? Stay away from them, too.
I hope this has been helpful. Please let me know your comments and questions.
