My previous post about the cash for gold scams got tons of comments and was one of the most read post ever, so I though I would do an update. (If you missed that post you may want to read it before you read this. Be sure and read some of the comments)

Where is the best place to sell my gold?

I have been both a buyer and seller of gold for the past few years.  I started buying gold just after 9/11 when gold was down around $350 an ounce.  Today Gold is hovering around $1200.  This increase is what has brought people out of the woodwork who want to sell their gold.

Some of you have gold coins but most people have gold jewelry or other things made of gold lying around and they just want to cash in on them.  Other’s need to sell their gold due to the economy and just need to raise funds.  So where is the best place to sell your gold.

The place not to sell your gold is the online gold firms who advertise on the web and on radio and TV.  I won’t mention any specific firms, as they like to sue people to keep their names off of blog posts like this one.  Even though I have liability insurance to protect me against those types of suits, I don’t want my rates raised if I get too many claims.

It turns out that the best place to sell your gold is your local gold dealer or coin store.  Scrap gold sells for between 15% and 60% of its spot gold value.  The large online firms that advertise on radio and TV will most likely give you something near the lower end (15% to 20%) but a few of the more famous ones have been known to give people even less than 10%.  But when I took my scrap gold to two local coin shops with signs in their window that said We Buy Gold and Silver, I got an offer of 35% from one and 44% from the other one (a rare coin shop in Bellingham, WA).  As an aside, these stores were also selling gold bullion and coins for a lower markup than the large gold companies that advertise on radio and TV.

The first thing to do is determine how much gold you have.

First look at the karat rating.  Gold’s purity is measured in karats. The term “karat” goes way back to the ancient bazaars where “carob” beans were used to weigh precious metals. 24 karat is pure gold.  Different alloys are used in jewelry for greater strength, durability and color range.  A piece of jewelry’s karat rating will tell you what percentage of gold it contains: 24 karat is 100 percent, 18 karat is 75 percent, and 14 karat is 58 percent gold. When comparing gold jewelry, the higher the number of karats, the greater the value.

Here is a chart that shows the relationship of gold’s karats to its purity by weight:

Gold Karat Chart

Step one is to weigh your gold and apply the karat percentage rating to determine what you have.  Here is an example:

You have a gold wedding ring that weighs .4 ounces and is 18K gold.  So the math would be 0.4 x .75 = .3 ounces of gold.  Now check the spot price of gold.  (You can find the spot price of gold on any given day at http://www.goldprice.org). When I checked the price today it was $1196.  So now multiply .3 X $1196 and you get $358.80.

That is how much your gold ring is worth if it were in bullion or coin form, but its not.  When someone buys your gold they have to melt it down and remove the impurities. Then they have to forge it into ingots and test and certify it for purity.  This is an expensive process, which is why dealers only pay you a percentage of the spot price.

Remember earlier where I said not to sell your gold to the large cash for gold firms: One of my readers did some research and found that the four largest cash for gold firms were paying less than 20% whereas his local pawn shop was paying 40%. So once you check your local coin shops, also check your local pawnshops.

Melt Your Own Gold

There is another way to get a slightly higher price and that is to do some of the work yourself.  If you melt the gold and form it into some sort of wafer or ingot, gold dealers will usually pay you a much higher percentage.  In fact if you learn to do this you could become a gold dealer as a hobby. You would buy gold from your neighbors and friends and melt it down and sell it at a higher price.

Here is a link to an article that shows you how to melt gold for resale. One thing you will need is a melting crucible and a torch.  A good company for gold melting supplies is QTE north America.  Professional gold melting supplies can run up to $1000 or more, but at the hobby level you can get started for less than $100 with a simple crucible and torch.

1 KG Gold Melting Graphite Crucible (cost $16.95)

With a crucible like this and a good torch set, you can melt up to one kilogram of gold at one time.  You will also need filter paper to remove the impurities.

Related posts:

1. Don't Fall for "Cash for Gold" Scam
2. High Price of Gold Bringing Cash For Gold Scammers Back
3. Cash for Clunkers Today – Cash for Geezers Tomorrow
4. Is Gold a Safe Investment for Seniors?
5. Where to Keep Your Cash When Rates Are Low

Tags: cash 4 gold, sell your gold

This entry was posted on Thursday, August 5th, 2010 at 9:04 pm and is filed under Finance, Scam Alert. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.