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Selling Gold? What You Need to Know
 | By Fred Borgman
September 01, 2009 |
Every where I look now-a-days there is someone wanting to buy my gold. Finally I e-mailed a question to one of the would be buyers (who e-mailed me) asking them what percentage of melt value would they pay me for my gold? I didn't expect them to answer and they didn't.
There is an old German saying that applies here - "no answer is an answer".
Recently a local TV station ran a report on gold buyers due to all the complaints that they were getting but they missed the boat entirely. They justified the low gold buyer payments by comparing them to the high department store jewelry prices. The high marked up prices for new jewelry, they explained, was for the design and art work, marketing costs etc. etc. etc. and that the scrap value doesn't even come close to the high dealer mark ups.
All that the TV station did was to stay on the good side of their advertisers. However they did not help their viewers one iota. So let me help those of you who read my blog. When you want to sell your gold, this is what you must know before you contact any potential buyer.
Gold fineness is divided into 1000 parts, .999 fine is considered pure gold (and silver). Old US gold coins are usually .900 fine which is 90% pure gold.
Gold and silver are weighed using the troy weight system in which 1 ounce is 31.1035 grams or 20 pennyweights.
Most jewelry is marked in karat weights like 10k, 14k or 18k. Pure gold is 24k, therefore 10k = .4166 fine, 14k = .5833 fine, 18k = .750 fine. In other words, divide the karat weight by 24 to get the actual fine weight.
Many pieces of old European gold are marked with just the fineness numbers like .333.
Also with older gold jewelry from the early 1900's to the 1960's there was a legal 1 karat margin of error allowed which most jewelry manufacturers took advantage of so you can safely assume that grandpa's wedding ring which is marked 14k is really only 13k.
Next weigh the gold item and multiply the weight by the fineness number and divide the result by 31.1035. The number you get will be the fraction of an ounce that the pure gold content of the item weighs.
Multiply that by the price of gold per ounce and that is your gold melt value.
Now the only question remaining is what will the gold buyer pay you for the item? If the buyer offers less than 75% of the actual gold melt value it is time to find another buyer.
How do you find out the gold price for that day? Google the name MONEX and go to their site where they are constantly displaying the current market price for gold and other precious metals.
Do your homework and keep the buyers honest. And by the way, you can use the same method the next time you are buying jewelry to avoid the needless mark up sellers.
Live long and prosper.
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