Although our business only deals in natural gold nuggets, we often get asked about tips for selling scrap gold. With the record high gold price in recent years, many people are looking to cash in on various forms of gold jewelry, dental scrap, coins, and bullion. Knowing exactly what the gold is worth can be somewhat confusing. To get a fair price, you want to have a good understanding of what your gold is worth, and what the best options are for selling it. Finding a gold buyer is not hard, but finding one that will give you an honest and fair evaluation can be. The best way to get top dollar is to have a good idea of what a fair price is, so letís discuss how you should go about it.
Before looking for a gold buyer, you should first determine what your gold is worth. Donít depend on the guy at the counter to figure it out for you! If you donít know what youíve got, then there is no way of knowing if an offer is fair or not. The first thing you need to do is determine if the gold you have is in fact real. Gold jewelry is often plated, and if it is then it has no value to a gold buyer, as the coating of gold is so thin that there will be virtually no gold weight on a plated piece of jewelry. If the gold is solid, then it has value and you next need to determine its purity.
Determining the purity of each individual piece of gold that you have is critical. If you are selling jewelry, you can often find a stamp indicating whether the piece is 10k, 14k, 22k, or just plated. This is a good way of indicating that you have real gold, but you will still want to test it, as there are plenty of fake gold out there to be aware of. Many other types of scrap such as placer or dental gold will have an unknown purity, so further testing will be required to determine the value.
A simple acid test kit is the easiest way to find the purity of the gold that you have. They are easy to use and give a simple breakdown of purity. Most test kits come with a test stone and small bottles of 10k, 14k, 18k and 22k nitric acid solutions. Rub the piece of gold on the test stone and use the appropriate acid solution until you have determined the purity. This is a simple process; just follow the directions that come with the kit.
It is important to be aware that this will help you separate your gold into the right grade, but a piece of gold that falls between the two purities will rank as the next lower grade. For example, a piece of placer gold that is actually 20 karats will go into the 18k pile, not the 22k pile.
Also note that we are determining the value of scrap gold here. If you have gold coins with numismatic value, gold bullion bars, or nice quality gold nuggets, there are better options than what we are discussing in this article. Only items that have no additional value over their gold melt price should be sold as scrap. Additionally, precious gemstones that are attached to earrings, rings and necklaces should be removed and kept, as you will not be paid for these by a gold buyer. A gold buyer doesnít care what amount you paid for a ring 5 years ago, all he cares about is the gold content, so never expect a premium over spot price from the average gold buyer.
Now that you have separated your scrap gold by purity, you need to determine the weight. Precious metals are weighed in troy ounces, but smaller quantities are often weighed in grams or pennyweights, so be aware of this and calculate the value using each measurement. Digital scales are quite inexpensive and can be purchased on eBay for around $20 or so. I have found that even the cheap scales are surprisingly accurate, and will work just fine for this.
Once you have figured out the weight and purity of your gold, it is a simple matter of doing some calculations. First, find out what the current spot price of gold is by visiting a site like kitco.com, which displays up to the minute prices of precious metals. Once you know what the price of an ounce of gold is you can easily multiply the amount of gold you have to the spot price. I find it easiest to do the conversion to grams rather than ounces (31.103 grams per troy ounce) since we are generally dealing in smaller quantities.
Now that we know the spot price of gold, we have to find the price of your scrap by breaking it down by each type. For example, a 10k gold ring is 10/24ths gold (or 41.67% gold content), so if your ring weighs 1 gram and the spot price of gold is at $40 per gram, then your ring has $16.67 worth of gold content. 14k is 14/24ths gold, or 58.33% purity, 18k is 18/24ths, or 75% purity, and 22k is 22/24ths, or 91.67% purity. Do this calculation with each grade of gold, and you will know how much actual gold you have in your scrap, although it is important to keep in mind that the gold has to go through an assay process to get the true value of gold. An acid test is a cheap and easy way to get a fairly accurate determination, but it is not going to be exact.
So at this point you have a nice collection of scrap gold all separated into the appropriate grades, you know the gold content, and a pretty good estimate to the actual value of your gold. Letís say for example that gold at the time you are looking to sell is priced at $1000 per troy ounce, and you have a pile of gold with exactly an ounce of gold content. Donít expect to get $1000 or you will surely be disappointed. Understand that spot price is based on the price of gold as a traded under the New York Stock Exchange, and a pile of scrap gold is not the same as a refined bullion bar or coin. Your scrap will need to be refined, and will still trade hands several times from the time that it is a pile of scrap gold to when it becomes a nice .999 fine piece of gold bullion.
So who do you sell to? There are literally thousands, probably tens of thousands of gold buyers in the US that want your scrap gold. Some run ads on late night TV asking you to mail your gold in to them and they will give you an offer. Do NOT do this. For one thing, these businesses are going to have extremely high overhead. Think about it, all those advertisements on TV cost a lot of money, and that cost is going to come out of your payout. At the same time, the gold is out of your possession, so do you really trust that type of transaction? It is well know that these types of businesses have some of the lowest payouts in the industry.
Another option is your local gold buyers. Most pawn shops, coin stores, and many jewelers are happy to buy your scrap gold. The best option is to go to each one and get an offer. Let them know that you have tested the gold already and have a pretty good idea of what to expect. This may help prevent some shady dealings. Another warning, many dealers want to take the gold into the back and weigh it up. Personally, if they wonít weigh it right in front of me, I would look elsewhere. Selling scrap to a local buyer is one of the preferred methods, since it is easy to turn down a lowball offer and look elsewhere.
Selling direct to the refinery seems like the best option, but this can also be tricky. Much like the cash-for-gold businesses that advertise on TV, you will have to ship your gold to them, and they will often cut you a check without even calling to give you an offer. Like any other business, the ethics and trustworthiness will vary. Whether you choose to mail your gold and hope for the best is ultimately up to you.
Hopefully this has helped clarify some options for selling your scrap gold. The best advice I can give anyone is to take your time, shop around, and donít be in a hurry. By understanding what your gold is worth before you sell, you will know a fair price when you hear it. Have reasonable expectations and understand that gold buyers need to make some money on the deal too. Find a price that is fair for both parties and make the deal.