Special Gold Report:
How to avoid being ripped-off when selling gold jewelry
George Hummer, Editor
Given the present economic situation here in the US, there is someone practically around every corner ready to buy your used gold jewelry or bullion. Many companies buy online. Others have actual brick and mortar stores that you can visit.
Many of these merchants are good, honest people who understand about fair play. Unfortunately, hoards of others are nothing short of "soul-less" predators who seem enjoy taking advantage of anyone that they can. I realize that these are harsh words, and I am stepping on quite a few toes. However, I feel that this is the truth. Most gold buyers in Tampa Bay, FL are paying less than fair prices to consumers for selling gold, probably somewhere around 50% of the current spot price. It's sad, but true.
The biggest thing that I just do not understand is why most consumers simply do not shop around for the highest price before they sell. Sure, they all claim to be "honest" and to "pay the most" for gold, but how can one tell? How can one sell gold in Tampa Bay, FL without getting cheated?
It's simple, become an educated consumer so that you don't become a victim- do your homework before you sell.
(1). Check the present spot price of gold:
If you are selling gold, find out what the current spot price is. This information is easy to find. Websites like Kitco, Monex or Bullion Desk have this information readily available. The spot price or spot rate of gold is the price that is quoted for immediate (spot) settlement (payment and delivery). Spot price is quoted in troy ounces (ozt), a type of measurement that has been used to measure gold, silver and platinum since medieval times.
(2). Try to get a basic understanding of ounces (ozt), pennyweights (pwt) and grams.
When you ask your local jewelry store or pawn shop what they are paying for gold, they will quote prices in either ounces, pennyweights, or grams. Unless you are selling gold coins or bars (bullion) the weight of your jewelry will probably be measured and quoted in pennyweights (pwt) or in grams.
Conversions:
20 pennyweights = 1 troy ounce (ozt). This can also be expressed as 1 ozt / 20 = 1 pwt
1 troy ounce is exactly 31.1034768 grams
1 pennyweight = 1.555 grams.
(3). Understanding gold types:
There are many grades of gold. With the exception of gold bullion (coins, bars, etc.), most of the jewelry you will find will contain some additional metals like copper, silver, nickel, and zinc are added to add hardness and durability to the jewelry. Here are the most common types of gold:
- 24 kt (pure gold, which usually comes in the form of bullion, stamped .999)
- 22 kt (contains 91.6% gold, 8.4% other metals. Sometimes used for jewelry, but still soft)
- 18 kt (contains 75% gold, and 25% other metals)
- 14 kt (contains 58.5% gold, and 41.5% other metals)
- 10 kt (contains 41.67% gold, and 58.33% other metals)
What does this all mean? It means that, unless you are selling bullion, one will have to adjust for gold purity to determine the actual gold value in an item.
Example: You have a 14 kt gold (.585) brooch that weights 1 troy ounce and gold spot price is at $1000/ozt at the time. Basically, something that contains 14 parts pure gold and 10 parts non gold metal, making it 58.5% pure gold.
Multiply: $1000.00 (spot price of 1 ounce of gold) x .585 (14 kt conversion) = $585.00
But wait, the merchant buying the gold now had to make their cut. The percentage of spot they are paying (after adjusting for gold purity) will determine how much money you walk away with. Here are some figure to think about:
- Merchant 1: Pays 50% of spot: $585.00 x 50% = $292.50
- Merchant 2: Pays 55% of spot: $585.00 x 55% = $321.75
- Merchant 3: Pays 60% of spot: $585.00 x 60% = $351.00
- Merchant 4: Pays 65% of spot: $585.00 x 65% = $380.25
- Merchant 5: Pays 70% of spot: $585.00 x 70% = $409.50
- Merchant 6: Pays 75% of spot: $585.00 x 75% = $438.75
- Merchant 7: Pays 80% of spot: $585.00 x 80% = $468.00
Bottom Line: I don't know about you,but I'de rather have $468.00 than $292.50 any day of the week.
4. Shop around and compare rates.
Visit as many different merchants as possible before you sell anything to anyone. Find out what they are paying per pennyweight for gold. If they will not give you this information over the phone, move on. Any merchant that will not be upfront and tell you what they are paying is not worth dealing with.