Monday, January 24, 2011

Selling Precious Metals


Since gold has gone over $1300 per ounce and everybody has decided to start buying, I feel people should be better informed of what they are doing when they go to sell their precious metals. As a gold buyer prior to this rush, I am tired of hearing stories of people blindly selling their gold for next to nothing and buyers taking advantage of people’s lack of knowledge. This results in the seller loosing money when they could have had substantially more. As a result I decided its time to enlighten you, the seller.

When you first decide you are going to sell your precious metals. Go through and divide up what you have by gold karat weight, sterling, or platinum. If you have things that you are not sure of the marks etc. put those in a separate bag for testing that can be done by a reputable dealer. If you have a scale weigh them out so you have an idea of what your gold weighs. Grant it that your scale may be off but a precious metal dealer will use scales that have been calibrated for accuracy.

Below are various ways precious metals may be marked somewhere on your pieces. Please note a high quality loop maybe required to actually be able to read these marks.

Possible gold hallmarks
10k aka 410
14k aka 585
18k aka 750
22k
24K
Dental gold is not marked but can be 16k or higher

Possible Silver Hallmarks
Sterling
Sterl
SS
.999
.925
.900
.950
.835
.800

You probably are wondering should I weigh my gold in pennyweights (dwt), grams (g) ounces (oz) or troy ounces (toz)? I prefer pennyweights as do most precious metal dealers however each dealer is different. Some people believe that you shouldn’t sell you gold if it is weighed in pennyweights. But most precious metal buyers buy gold and platinum in pennyweights. Sterling is almost always purchased in ounces or troy ounces. If you are worried about selling your gold in pennyweights I am giving you a conversion chart so you can figure your pennyweights weights in to grams or ounces.

1 g to 1 dwt 0.643014931
1 g to 1 toz 0.0321507466
1 g to 1 oz 0.0352739619

1 dwt to 1 g 1.55517384
1 dwt to 1 oz 0.0548571429

 I suggest you should take your precious metals to several locations before selling out right. If you know your approximate pennyweight you can call around to different areas to find out what prices they are paying. If a store tells you they can’t give you an exact price just ask for an approximate price. It usually won’t change that fast if you are going to sell it within a 24 hour period. Some buyers buy based on spot price, but most stores have a setup price they buying based on.

There are many options to sell your precious metals available.

Brick & Mortar Shops
The traditional brick and mortar are businesses that when they buy from you they have to factor in the expenses of their rent, utilities, employee payroll, etc. These include pawn shops, jewelry stores, cash advance stores, drive through precious metal facilities, antique stores, gold buying facilities, etc.

Mail Order
This is where you order a free mail packet and mail your precious metals in the mail. I feel this is the biggest risk you can take. There have been several television documentary stories done on these mail in gold buyers and I haven’t seen a positive story yet.

Gold Buying Parties
Recently these have been on the rise. These are usually done in someone’s home and you know the hostess. It’s a friendly environment. You go in they check your gold, weigh it, and offer you a price. They do give the hostess a kick-back usually 10% of what they buy. So that is factored into their purchase price. Always take your gold to a few locations before you sell to a gold buying party a lot of the time you could have gotten more for your gold.

Motel & Banquet Halls

I have seen in my local paper a numerous amount of ads for selling your precious metals among other things to people that are traveling through town and setup in a motel/hotel room, banquet hall or meeting room facility. Customers of mine have not have positive experiences with this but I personally have not looked into this.

Flea Markets & Antique Shows
You will always find buyers of precious metals setup at flea markets and antique shows. If there are several dealers at a show buying I suggest you shop around the show before you sell. These dealers do have the over head of booth rent to factor into their price.

Things to remember when you are selling
1. When the gold buyer is weighing your gold, make sure they weigh out each karat weight individually and pay according to weight. Some buyers put it all on the scale and try buy it at a 10k gold weight price. That’s not good if you have 14k, 18k, etc mixed into that amount.

2. If you decide to walk and not take a price be leery if they start offering you more.

3. If they test unmarked gold make sure they test more than just the 10K gold acid. For the most accurate testing they may cut into your scrap that is fine. It is the most accurate way to acid test your precious metal.

4. If a magnet sticks to the metal IT IS NOT A PRECIOUS METAL regardless of what the gold is marked.

In writing this blog I did some research. I called around to several gold buying facilities in my area and learned how much difference there really is in price. One place I called told me that they were buying silver for $0.20 per pennyweight which works out to about $4 an ounce. That same day I was paying $20 per ounce. That same facility was also paying $14 to $18 for 14k gold depending on how much gold I had. I still don’t understand why the amount I had mattered the price should still be the same price. I was paying $28 per pennyweight that day. Also while setting up at a recent show. Where I was pay $30 per pennyweight for 14k gold a jeweler setup buying gold was paying $10 per pennyweight for 14k gold. It just
shows you how unfair a lot buyers can be. ALWAYS SHOP AROUND!

1 comment:

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