Selling Your Gold: What You Should Know About the Process
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.
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.
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 simply 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.
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
|1 grain (gr)
|| = 0.0648 grams (g)
||1 pennyweight (dwt.)
|| = 1.5551 grams
||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 firstname.lastname@example.org.
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 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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