High Price of Gold Bringing Cash For Gold Scammers Back
October 13th, 2009 by Skip McGrath
Spot gold hit $1,063 per ounce this week before backing off slightly. Its no surprise gold has gone this high and may head higher. As the Federal Government continues to pile up debt and print money the dollar will surely head lower. Since gold is priced in dollars, as the dollar heads South, gold will head North.
The recent high price of gold has spurred companies that buy gold jewelry from consumers back to higher advertising. just this week I have noticed more ads on Google and on television telling consumers to send in their gold. Technically these companies are not running a scam because they do pay you for your gold. But the amount they pay you is usually far less than what your gold is worth.
Here is an example: A lady neighbor of mine sent in a pair of 18K gold earrings that weighed 0.6 ounces. OK – I am a little math challenged and if I get this wrong I am sure I will hear from some of you –but here goes:
Eighteen karat gold is approximately 75% pure gold. So 75% of 0.6 oz = 0.45 ounces. Multiply this this by $1000 oz and the earrings would be worth $450 gold value. However, scrap god is usually valued at 50% to 60% of its gold content value. So using 50%, the earrings should be worth $225. The Cash for Gold company she mailed the earrings to offered her $108 –less than half what they are worth. So yes –technically that is not a scam, but its pretty close.
On my advice she called the company and asked them to return the earrings.
When she did this, they upped the offer to $125 –still half what they were worth.
She declined and asked them to return the earrings and they said they would. After 2 weeks the earrings still hadn’t arrived so she called again. They spun some story and said they were on the way. To make a long story short she had to call once a week for 6 more weeks before the earrings came back.
The good news is that in the 6 weeks it took to get her earrings back the price of gold had increased. She took them to a local coin shop who is also a gold dealer. He gave her $270 for the earrings and paid her in cash.
So yes now is a good time to sell your gold –or if you want a while you could even get more in a few months as the price of gold will probably work its way higher as the dollar continues to weaken. But before you send your gold off to some mail-order dealer, check with pawn shops and coin and gold dealers in your local community. And shop around –don’t take the first offer.
Tags: cash for gold scam
