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Selling Your Gold: What You Should Know About the Process

by Ed Lewand (01/16/13).

Gold is an element, its periodic chart symbol is Au and its atomic number is 79. It is yellow when it comes out of the ground and is mixed with different alloys to produce the purity or karat and colors that we see. If you want to sell your gold, you need to know how it is graded and weighed.

As a professional independent appraiser, people have come to me over the years to sell their gold. During the consultation, I would sort their gold items into what should be sold for gold weight and what should be sold as jewelry (usually antique). This article is to help educate you on how to sell your gold and optimize your return as well as other important information about gold.

After sorting through their pieces, I would give them the breakdown of the price for 18-karat, 14-karat and 10-karat gold for that day and then show them the price a gold refiner would pay for the gold (or the price the jeweler would get when they sell gold to the refiner). I would then instruct them how to sell their gold to a refiner (if they buy from the public) and to look for a price as close to the amount cited that day.

SPECIAL NOTE:: One must understand that most states and municipalities have laws to protect the public in the case of stolen goods. Jewelers may have to hold gold or jewelry up to 30 days, reporting to the police what they have acquired, after which they are free to resell the pieces to the public or melt it. As you will see later in this article, even if gold dropped $200 an ounce during that time span, the actual difference in what the melt value would be is very small.

After I have concluded my consultation with a client, I would ask him/her to let me know the prices they were cited. The difference in values from a certified jeweler to the “we buy gold stores” was amazing. I lecture on appraising jewelry (at NYU) and how to buy and sell jewelry and antiques, so it is very important to know what is gold and how it is priced and broken down.

Let’s start with the basics. Gold is an element, its periodic chart symbol is Au and its atomic number is 79. It is yellow when it comes out of the ground and is mixed with different alloys to produce the purity or karat and colors that we see (see chart of alloys below).

Gold is weighed in the Troy system, which is approximately 10-percent heavier than the avoirdupois system that is used every day. The grain (not gram) is the smallest unit of measurement and is the same in both systems; however, from that point on, the systems differ.

Within the jewelry trade, there are two weights that are used; the Pennyweight (abbreviated as dwt.) and the Gram (g). Usually, you we see the price per gram when you buy gold because the price per gram appears to be lower than the price per pennyweight but, the truth is, they are the same. There are 20 dwt., in a troy ounce and 31 grams in a troy ounce. Always be careful when buying gold because the gram price will appear to be less than that of a pennyweight.

Because gold and jewelry have been popular for thousands of year, many countries have set standards for the sale of jewelry and gold in their countries. In the United States, the minimum standard is 10K, which means that nothing can be sold as gold that is less than 10-karat. In England, it is 9K and in Germany 8K. In France, it has traditionally been 18K, but this changed in the 1990s to 14-karat, which I have found is seldom used.

To estimate the price of scrap gold for the day (or the price of gold in general), you take the gold price—for example, let us say gold is $1,600 an ounce for the day—less 5 percent. This is just the number I use. Some refiners pay more and will only take 2 percent while others will be more. Shop around for the best price. Some dealers have been going to stores and buying gold and taking it to the refiner and charging a few percentage points for their fee. Over the years, I have learned that most jewelers do not know how to estimate the price of gold and trust what someone tells them (remember, trust has to be earned. If someone tells you something, it does not always mean they are correct, even if they have a certain reputation).

Over the years, I have learned that most jewelers do not know how to estimate the price of gold and trust what someone tells them

For example, to figure for something that is 14 karats, which is 58.5-percent (stamped sometimes “585”) gold, take the price of gold for that day—let’s use $1,600—you would multiply it by 95 perrcent (or less 5 percent), which would equal $1,520, and then multiply it by 58.5 (the percentage of gold for 14k) and it would equal to $889.20 per ounce of 14-karat gold. Take this figure and divide by either 20 for dwt. (44.46 per dwt. of 14-karat gold) or 31 for the price per gram ($28.68 per gram).

To figure 18-karat, which is 75-percent gold (stamped sometimes 750), take the price of gold for that day—again, let’s use $1,600— times 95 percent (or less 5 percent) would equal $1,520 and multiply by 75 percent (the amount of gold for 18k) and it would equal to $1,140.00 per ounce of 18-karat gold. Take this figure and divide by either 20 for dwt. (57 per dwt. of 18-karat gold) or 31 for the price per gram ($36.77 per gram).

So if gold drops $200 per ounce, the difference is about $6 to $7 per dwt. In most cases, I have found most of the reputable buying companies buy back from the refiner’s price by 20 to 30 percent. You can track the price of gold at Kitco.com and look up historical data to see how much gold drops in a 30-day period. I have never really noticed a drop of more than $200 to $300 per ounce in that time span, although that does not mean it hasn’t or can’t happen, so one should always do their own research. Hopefully, I have given you the information to help you research and obtain the highest and best price for gold.

Good Luck!

Gold Fineness

To figure out the percentage of gold, take the karat and divide by 24. Example: 10 divided by 24 = 41.7, the percentage of gold in 10k

Weights

Troy weight

1 grain (gr) 0.0020833 ounces  = 0.0648 grams (g)
24 grains 1 pennyweight (dwt.)  = 1.5551 grams
20 pennyweights 1 troy ounce  = 31.1035 grams
    • To convert Pennyweight (dwt.) to grams: dwt. x 1.5552 = Grams
    • To convert Grams to dwt. you can divide by 1.5552 or multiply by 0.6430

Other Useful Things to Know

Did you know that when an item carries a quality mark, the law requires that it also carry the manufacturer’s or seller’s trademark? However, it does not require it have a quality mark. Most jewelry tradeshows require that all vendors have registered trademarks. A hallmark is issued by a government assuring the quality of the gold, while a trademark is the manufacturer’s mark for identification

If you have any questions or concerns, please feel free to contact me by contacting me by e-mail at ealcas@msn.com.

Edward Lewand, GG, ASA, AAA is a graduate gemologist and an accredit appraiser from the Appraisers Society of America and a certified member of the Appraisers Association of America. He is also the director of the Antique Jewelry and Art Conference “Jewelry Camp” and educational program on Jewelry and small antiques. He is available for lectures for luncheons, clubs and charitable events and fund raisers by offering appraisal days.

All rights reserved republication with permission.

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8 Responses to “Selling Your Gold: What You Should Know About the Process”

  1. John Johnson says:

    Mr. lewand didn’t really tell you a whole lot about buying and selling gold. Any gold I have bought or sold is measured in grams not penny weight. Gram weight is the standard for gold trading. My advice for buying and selling gold is get yourself a gold test kit and small digital scale that measures in grams.The test kits will test for the gold content.With the scale and test kit you will know what you have and how much it weighs when you sell it. this is a small investment of about $50.00 or less.Historical gold coins,fraternal medals, etc.in some cases will be worth more then there gold weight.Jewelry unless it is designer or old and rare is usually only worth it’s gram weight.Most jewelers, pawn shops will pay you on the spot. They require I.D.Valid drivers license because of stolen items. Refiners will pay you after your items are refined and by the total karat content and weight. If your not in a hurry to sell your items.Historical gold or coins will usually command a higher price at a good auction house. I hope this takes some of the mystery out of buying and selling gold.John Johnson

    • ronald clarke says:

      enjoyed your comments. As an example I have a 14K gold ring with a $5.00 gold piece (1932) that is surrounded by a ring of small diamonds. Would this be offered as a piece of jewelry at a consignment house or for auction or be sold for weight at a commercial “we buy gold” shop.

      Interestingly I am finding more and more of these “shops” opening up in our area (San Francisco Bay Area). Somebody has to be making money in this market.

      Any suggestions?

      Ron Clarke
      Pleasant Hill, CA

      • John Johnson says:

        Ronald, I would bring it around just to see what People would offer you.Gold content and weight in grams 10k 14k 18k 22k would command different prices.A good honest jeweler would be able to tell you more about the value of the diamonds with the gold. A appraisal would let you or a buyer know what they would have to pay retail to replace it. If you have a good mix of friends you might want to bring up you have a ring for sale.The gold buyers will want it as cheap as they can get it.You may want to sell it online with a reasonable reserve, or auction it to get most money for your item.

        • Mike says:

          Mr Johnson,

          As a refiner, I can assure you we use pennyweights as our system of measurement. It’s really six one way, half a dozen the other; whether or not the gram is the standard is irrelevant. The key is finding an honest gold buyer with a proven track record. Anyone with a calculator can convert between grams and pennyweights.

          • John Johnson says:

            Mike, Thank you for your comment.Usually only refiners and jewelry stores use pennyweights.I was aiming my comments to the novice gold seller.Just trying to make it simple.If you have ten grams of 10k gold and your getting paid $15.00 a gram you would have $150.00.Nothing against Refiners or pennyweights.Usually a Refiner will pay you more in the end after the gold is refined then the gold buyer up the street.Am I correct?

  2. Ed Lewand Ed Lewand says:

    Well am finally back long enough to write a response to Mr. Johnson
    First Mr. Johnson I mention both gram and pennyweights in the article. Next I break down on how to sell you gold by weight which is how most of the stores are buying it see paragraphs 6 and 7 above
    And that one should be aware of the differences between grams and pennyweights when they go in to sell
    I then show how to figure the price of gold for that day of what a refiner is paying a jeweler and recommend finding the store or “Gold Buying Place” that pays the closest to that number. Most of the Reputable stores in New York pay 20 to 30% below the price the gold refiner pays them, some might even work closer. See paragraphs 9-12
    Next suggesting that someone should purchase acids to test the gold does not tell them how much they should be getting paid for the gold unless they have an understanding of the pricing of the gold see paragraphs 9-12 again. Also testing on the touch stone takes a little practice and education and suggesting that someone should buy acids for testing is dangerous the acids are a mixture of hydrochloric and nitric acids (which makes Aqua-Regia acid), which even in its mild state can stain skin and damage things and should not be used by a person who does not have any instruction.
    As far as using an auction one should check with them for fees etc., which can lower your bottom line and possibly sell below the scrap value. Just another side note coins once in jewelry might lose any numismatic value they might have, you should consult with an expert on coins. But most refiners I have dealt with over the last 30 years pay slight below the gold price for the day. And you are right will not offer anything for the numismatic value
    One more note that I did not mention in the article is in selling to an actual refiner, since you tell people how to sell gold with acids and a scale, which again any reputable store will tell you the weight and the karat content of what you have and if they don’t find one that does. If you are having a hard time figuring gold from the article please call and I’ll explain it step by step. A gold refiner will pay for other metals in the gold such as silver and Platinum besides the gold content, if they do a melt. They will suggest a melt if you have a large amount of weight. The refiner’s will use (I believe) an x-ray spectrograph to determine the metal content instead of a fire assay.
    Also, I did mention using a professional appraiser to separate the jewelry for you from what is scrap gold and what might be salable as jewelry in the first few paragraphs, depending on one’s locale professional appraisers would charge a small fee and are happy to help.

  3. Thanks for providing some useful information about selling gold.

  4. Frank says:

    Gold and silver, like other commodities, have an intrinsic value, which is not arbitrary, but is dependent on their scarcity, the quantity of labour bestowed in procuring them, and the value of the capital employed in the mines which produce them. – David Ricardo

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