With the price of gold recently reaching $1,900 per troy ounce and expected to hit $2,500 per troy ounce by year’s end, the temptation to sell gold is high for many consumers looking for investing advice. An uncertain stock market and the recent downgrade in the United States’ credit rating have created a major demand in the selling of gold.
In addition, with the market shifting almost daily, many are looking for a stable investment, and gold is seen as an attractive option.
With so many possibilities for selling your gold, how do you ensure that you will achieve the best results?
1) Start by doing your research. Gold is measured by the troy ounce, which is 31.1 grams as opposed to the 28 gram standard ounce. If you choose to measure gold on your own, keep in mind this conversation rate.
The weight and the purity of the gold combine to determine its value; 10-karat gold is 42 percent pure gold and 58 percent other metals, while 18-karat gold is 75 percent pure gold. Make sure that gold of different karat values is not weighed together so that you will get the best price overall.
2) Find a trustworthy appraiser. The Better Business Bureau recommends getting two to three gold appraisals before selling. Locate a dealer through a source like the National Association of Jewelry Appraisers. Appraisals are especially useful when pricing jewelry to sell.
Once you are ready to sell, make sure you understand the differences between traditional jewelry dealers, gold parties, and mail-in companies. Jewelry stores are usually your best bet for a deal, especially if your gold is still in good shape. Stores will offer you the closest to retail value possible or, if you only have scrap gold, will be able to make you an offer closest to the spot price of gold.
3) Know the different ways to sell gold. Selling your gold to the jewelry store that appraised it is usually the best bet, but it’s not the only option.
Gold parties are increasingly becoming the next Tupperware parties. If you have broken chains or earrings and know of a party in your area, it can be a good way to get some fast cash. The average seller at a gold party can make $100 to $200 in one night. However, don’t expect to get the best prices for your gold at one of these parties—the host and the appraiser each take a cut of the money. You will likely receive about 70 percent of your gold’s appraised value if you go the party route.
Mail-in offers seem tempting, but they often will not pay top dollar for your gold. These offers can be a good route to take if you have small amounts of gold and don’t live very close to a BBB-accredited dealer, but keep these tips from the BBB in mind:
- Take inventory, complete with photographs, of what you are sending. Make sure to get appraisals ahead of time.
- Insure the items in case they are lost or, worse, stolen.
- Check the company’s policies on reimbursements for lost items, as well as its policy on returns if you are not satisfied with its quote. Most companies will give you 10 to 14 days to change your mind. If you do change your mind, make sure to send the company’s check back via Certified Mail with return receipt requested so that you will have proof that the company received its money.
4) Beware of scams. As with any too-good-to-be-true situations, beware of buyers who promise too much and don’t deliver. It’s always best to research your buyers beforehand, but be aware of some common buyer tricks. For example, some buyers will weigh the gold with a pennyweight (equivalent to 1.555 grams) but pay for the weight in grams, which results in a loss to the seller. Consumer Reports advises sellers to approach dealers on the same day if possible to avoid confusion on the price of gold. Above all, you should never feel pressured to sell your gold on the spot, especially when just calling for appraisals.
5) Sell gold, buy silver. Some experts are advising investors to sell gold and buy silver. Gold is being hoarded, while silver, which is used in electronics, medicine, and water purification, as well as jewelry, is being consumed. Because of this, silver stockpiles are depleting, compared to gold’s increasing stockpiles. Silver is also currently underpriced. Historically, gold tends to be about 14 times more expensive than silver, but today, gold is almost 50 times more expensive than silver. An ounce of gold may be valued at $1,800, while an ounce of silver may only be valued at $36.
6) Be cautious. The price of gold might be a tempting reason to sell, but don’t rush to jump on the gold-selling bandwagon. Gold has been trending upwards for a while, and it still has a long way to go. While the payout now is great, the payout in the future could be even better.
7) Be realistic. Selling your leftover gold jewelry is a great way to pick up some cash, but it’s easy to get swept up in the hype. Keep in mind that most buyers are not going to give you the exact market price per ounce. Expect around 30 percent to 50 percent through a mail-in service, 70 percent from a gold broker, and sometimes up to 90 percent if you go directly to a jewelry store. Staying realistic when setting out to sell your gold will help you to get the best price for it.