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.

Here is a story from a woman in Florida who barely escaped having her car broken into or stolen: 

“I locked my car.  As I walked away I heard my car door unlock.  I went back and locked my car again three times. Each time, as soon as I started to walk away, I would hear it unlock again!

Naturally alarmed, I looked around and there were two guys sitting in a car in the fire lane next to the store. They were obviously watching me intently, and there was no doubt they were somehow involved in this very weird situation.  I quickly chucked the errand I was on, jumped in my car and sped away.  I went straight to the police station, told them what had happened, and found out I was part of a new, and very successful, scheme being used to gain entry into cars.  

Two weeks later, my friend’s son had a similar happening….While traveling, my friend’s son stopped at a roadside rest to use the bathroom.  He locked the car with the locking button on his key fob. When he came out to his car 4-5 minutes later, someone had stolen his cell phone, laptop computer, GPS navigator, and briefcase.

He called the police and since there were no signs of his car being broken into, the police told him he had been a victim of the latest robbery tactic — there is a device that robbers are using now to clone your security code when you lock your doors on your car using your key-chain locking device..

The thieves sit a distance away and watch for someone to lock their car with a keychain locking device. When they see you go inside of the store, restaurant, or bathroom they now have a few minutes to steal and run. The police officer said to manually lock your car door-by hitting the lock button inside the car — that way if there is someone sitting in a parking lot watching for their next victim, it will not be you.

When you hit the lock button on your car upon exiting, it does not send the security code, but if you walk away and use the door lock on your key chain, it sends the code through the airwaves where it can be instantly stolen.”

Look how many times we all lock our doors with our remote just to be sure we remembered to lock them — and bingo, someone has our code…and whatever was in our car.

You have probably seen the TV ads:  Send us your gold jewelry and we will send you cash.  Don’t fall for this.  You can do much better selling to a local gold dealer.  When you melt down jewelry for gold this is called scrap gold.  The price for scrap gold has always been much lower than the spot gold price because of the work involved in surveying, melting, recasting and storage and distribution.  Today most gold dealers will give you about 50%.

But those companies that advertise on TV who say they will send you an envelope, you mail in the gold and they send you cash -well some of those companies are giving consumers as little as 5% of the spot value. And don’t trust the so called guarantees.  Many of these companies claim that you have 10 days to return the money and get your gold back, but when you read the fine print, it says “10 days from the date on your check.” But, many consumers have complained that the write the check and then hold it for 3 or 4 days before mailing, so you often only have a day or so.

When you send in your jewelry you are basically at their mercy.  If you want to sell your gold, you can often shop around for local pawn shops and gold coin dealers who often buy gold.  This way you take the gold in, and stand their while they test and weigh the gold. Then the dealer makes you an offer. If you don’t like the offer simply thank the person and leave.

If you would like to know what your gold is worth you first have to know how many karats it is. Fourteen karat gold is about 50% pure, whereas 18K gold is about 73% pure.  You can weigh your gold on a digital postage scale to get the approximate weight, then go to the Scrap Gold Calculator at Mid-States Refining website at http://www.midstatesrecycling.com/karatpro.php.  Select Troy Oz. on the pull down at the bottom  of the page and then put in how many ounces of each karat of gold that you have and it will calculate the value.  Notice that there is a $100 refining charge. So if you only had a 1 oz, 18K ring you would get $323 for it. But if you had 5 ozs of 18K gold, you would get $2901 which is about $580 per ounce.  Even at the lower price of $323 that is about $300 more than most of the cash for gold places would give you.

Lastly if you really want to get the most money, then you can melt down your own gold.  Basically all you need is a propane torch and a crucible to hold the gold.  Just Google the term “how to melt gold” and you will see results from Wiki and eHow that give instructions.