Selling Gold Jewelry to Gold Buyers
At the time of this writing (September, 2011), gold was selling for US$ 1,800 per troy oz., or thereabouts. Gold buyers are the new business rage. Google shows more than 1,800,000 results for the search phrase "gold buyers".
Balance that against the search phrase 'warning "selling gold"' which shows 588,000 results. Is selling your gold risky? You bet it is!.
Gold buyers can be anyone from the next door neighbor to a mail-order company in Timbuktu. Agreements can range from simple face-to-face exchanges, gold parties, to shipping instructions in the mail.
Selling to someone you know and trust is obviously more comfortable than selling to a guy named "Bubba" in a dark alley. Actually, Bubba might get some tips from some of the "by mail" crooks.
Scrap Gold Realities
If a buyer is planning to refine the gold from your jewelry, he will be looking at a number of factors.
- Spot Price of Gold
- Alloy of Jewelry
- Cost to Refine
- His Overhead
Price of Gold
Finding the price of gold is easy. Just look online or in any financial publication. The problem is, those prices will be for certified 999.9 fine gold. Because gold prices are volatile, any gold buyer will need to protect himself against a sudden drop in price during the transaction and refining processes.
Gold Jewelry Alloys
Pure gold is seldom, if ever, used for jewelry. It's just too soft. Pure gold will deform and break easily. As for polish, even higher alloys such as 20 and 22k will not take or maintain a good polish. And higher gold alloys will scratch easily.
Karat gold alloys by percentage. Actually it's pretty easy by calculator if you remember that 24k = 100%. But we will do the math for you.
- 9k = 37.5%
- 10k = 41.6%
- 14k = 58.3%
- 18k = 75%
- 20k = 83.3%
- 22k = 91.6%
- 24k = 100%
Gold may be beautiful, but the process of refining gold is pretty nasty. It involves hydrochloric and nitric acids, filtration, fumes, the possibility of chemical burns, etc.
So the firms that do this legally have to jump through a number of bureaucratic and environmental hoops. As a result, another hand reaches into the profit pool to the tune of 5% - 10%.
Gold Buyer's Overhead
Before you assume that a gold buyer surely must have little to no overhead, consider the cost of a 20 second television commercial. Advertising is the greatest cost for many gold buyers. They have to pay for that -- er, sorry -- you have to pay for that.
Selling Gold - The End Game
This is where you absolutely must use good judgment. Do your homework! Internet searches for scams and fraud can open you eyes to everything from deception to fraud -- but you need to open your own eyes.
Here is a good place to start looking at gold buyer complaints.