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The Michael Ivankovich Guide to Selling Gold

Here are some important points to consider when selling gold:

  • Several factors will determine the value of your gold including the Gold's "Fineness", its "Weight", today’s "Spot Price" of gold, and the gold dealer's "Spot Price Payment Factor".

  • The Gold's "Fineness" is often, but always, impressed into the gold:
    • 24k gold is pure .999 Gold
    • Gold marked 18k is 75% pure gold and 25% base metal
    • Gold marked 14k is 58.3% gold and 41.7% base metal
    • Gold marked 10k is 41.7% gold and 58.3% base metal
    • Anything less than 10k cannot be legally called gold in the United States

  • Some gold is unmarked and must be tested to determine its fineness. (We can help you test your gold).

  • Over the years various countries have used various gold standards with different marking standards, which makes selling gold even more complicated. (We can help you with international gold markings).

  • Most dealers will tell you that "They" pay more than anyone else when in fact they don’t.

  • Dealer "Percent of Spot Price Payment Factors" can vary widely … for the same items.

  • Dealers will never reveal their "Payment Factor” if you don't ask.

  • Calculating the value of gold can be quite confusing and a simple mistake could cost you thousands of dollars.

Gold Vignette/Testimonial

Our clients asked us review a box of coins and jewelry to see if there was anything of value. In that box, mixed in with assorted lower value Foreign Coins and Costume Jewelry were eight Gold U.S. Coins and some assorted 10k, 14k, and 18k Gold Jewelry, which we subsequently sold for more than $12,000 for our clients.

"$12,000.00 for a few coins and a few pieces of jewelry! We had no idea and would have sold the entire box for a few dollars. Thanks for all of you help." … Bucks County, PA

We Can Help
If you are selling Gold Jewelry, Gold Numismatic Coins, Gold Bullion Coins & Bars, or Gold Decorative Accessories, and if you are uncertain of value or how to proceed, we can help. We suggest that you first read the article below to better understand the gold selling process. Then call us at (215)-264-4304 to further discuss your needs. Distance should not present a problem as we serve the Greater Philadelphia tri-state Pennsylvania-New Jersey-Delaware region.

Our Gold-Selling Services include:
• Sorting the real gold from the plated gold, and identifying unmarked gold.
• Estimating the actual gold value … before selling.
• Locating those dealers paying the highest percent of spot price.
• Negotiating a better price on your behalf, and then negotiating the actual sale for you.

The Michael Ivankovich Guide to Selling Gold:
How the Scrap Gold Game is Really Played
Michael Ivankovich, GPPA, MPPA

It seems like each week several new "We Buy Gold" store-fronts open in our area. The new store openings seem to correlate with the "Spot Price" of gold. The higher the Spot Price, the more new stores open their doors.

Most of these stores have short term leases, and most will probably not be around for very long. They are simply trying to take advantage of the rush to scrap gold based upon today's high prices.

But before you rush out and scrap you family's treasures and heirlooms … BEWARE!!! You had better understand "How the Scrap Gold Game is Really Played" because if you are not extremely careful, the windfall you are expecting may end up in the gold dealer's pocket, and not yours.

Please Note: Different countries have different gold standards, using different fineness standards, and different markings. This article is designed for gold jewelry using the more common 24 karat standard, and gold that is clearly marked 18k, 14k, and 10k. Although the principles covered here apply to other gold standards and fineness, as well as gold coins, gold bars, gold bullion, and gold decorative accessories, dealing with that gold is intended for another article.

There are several key factors that must be considered when valuing gold.

  • The fineness of the gold.
  • The weight of the gold.
  • The spot price of the gold.
  • The percentage of spot price that gold dealers will actually pay.

Here is a 5-step approach to understanding "How the Scrap Gold Game is Really Played".

Step 1: Determine the "GOLD FINENESS": Pure .999 gold is 24 karat, or 24k. Pure gold is a soft and malleable metal, and by itself is too soft to use for jewelry. Rather the gold is mixed with a base metal (e.g., copper) to strengthen the metal and vary the fineness of the gold.

  • 18k gold is 75% pure gold, and 25% base metal.
  • 14k gold is 58.3% pure gold and 41.7% base metal.
  • 10k gold is 41.7% pure gold and 58.3% base metal
  • Note that 10k is the minimum legal karat-age allowed to be called "Gold" in the U.S.

Although tiny and often difficult to read, the karat fineness (18k, 14k, 10k, etc.) is usually (but not always) impressed somewhere on the gold. Often a magnifying glass is needed to read the marking so be prepared to have at least a 10x power magnifying glass nearby. However, remember that some gold is unmarked and can only be verified by testing. (We can test it for you.)

Step 2: Calculate the "GROSS ITEM WEIGHT": You must understand that only the gold has value. There is no gold value to metal pins, metal clasps, stones, etc. The dealer will literally rip all such non-gold apart and weigh only the gold content. Once it's ripped apart, the jewelry's intrinsic value is gone so be 100% certain that you are ready to let the item go before proceeding. And remember to take the stones because they may have a separate value.

Gold's Spot Price is quoted in Troy Ounces. However, many non-jeweler's scales will yield "Avoirdupois Ounces" which are different from Troy Ounces. Since gold spot prices are quoted in "Troy Ounces", you will need to convert the "Gross Item Weight" from Avoirdupois Ounces to Troy Ounces using a conversion factor. This will yield the "Gross Item Weight" in Troy Ounces.

Troy Ounces apply when dealing with larger amounts of gold. But when dealing with jewelry, prices are often quoted in "Pennyweights" or "Grams". Jeweler's scales will display "Pennyweights (dwts)" and/or "Grams (g.)" but, if you are not using such a scale, you will have to do a little basic math to convert the "Gross Item Weight" to Pennyweights or Grams.

Step 3: Calculate the ".999 GOLD WEIGHT": As mentioned in Step 1, gold is combined with another stronger metal to enhance its strength. To determine the amount of pure ".999 Gold Weight", multiply the Gross Item Weight in Step 2 by the "Gold Fineness" percentage in Step 1.

Step 4: Calculate the "GROSS GOLD VALUE": Like the stock market, the spot price of gold is constantly fluctuating. To determine the "Gross Gold Value", multiply the number of pure .999 gold Troy Ounces, Pennyweights or Grams in Step 3, times the current "Gold Spot Price" per Troy Ounce, Pennyweight or Gram. This will yield the "Gross Gold Value".

Step 5: Calculate the "NET GOLD VALUE: Steps 1-4 are relatively easy to calculate. Step 5 is the trickiest of all, this is where the "Smoke & Mirrors" usually occurs, and this is where most people who don't understand how the "Gold Game" is played get taken advantage of.

Unless you plan on melting and refining the gold yourself, the refinery will have to make a profit, and any middlemen (i.e., the gold dealers) must also make a profit. So you will NEVER receive the full "Gross Gold Value" in Step 4 above. Rather, you will receive a "discounted" amount based upon the dealer's "Percent of Spot Price Payment Factor" which factors the expenses and profits for any middlemen left in the chain.

Here is the Key Point: Most gold dealers will never tell you what their "Percent of Spot Price Payment Factor" is. And most individuals new to the scrap gold game don't know what payment factor to expect, and don't ask what payment factor was applied. And this is where the gold dealer has the advantage.

In a typical transaction, you bring your gold to the gold dealer. The gold dealer will perform their own 5-Step calculations, and then simply make you an outright cash offer of what they are willing to pay. You can accept their first offer, reject it, or make a counter-offer. But since most people don't know how the gold game is really played, most accept the first offer on the table. And the gold dealers know this.

* * * * * * * * * * * * * * * * * * * * * *

In summary, gold dealers are not all the same. Most claim that they pay more than everyone else and dealer payment factors can vary by 25%-50% ... or more ... for the same merchandise! It is imperative that you locate the gold dealer that will pay you the highest percentage of spot price possible. Today is a great time to sell your un-needed gold but, if you fail to learn "How the Scrap Gold Game is Really Played", you could end up losing literally thousands of dollars. Don't let this happen to you.

Because of our knowledge of the gold selling process and because of our higher selling volume, we can negotiate a higher selling price for your precious metals than you could achieve on your own. If you feel that you could use our help, or if you have any questions, call us at (215)-264-4304.

Published Gold & Silver Articles by Michael Ivankovich

Published Gold & Silver Articles by Michael Ivankovich: For more information on selling your precious metals, we invite you to read Mike's articles found on this Web Site:

  • The Michael Ivankovich Guide to Selling Gold: How the Scrap Gold Game is Really Played
  • The Michael Ivankovich Guide to Selling Silver: How the Scrap Silver Game is Really Played
  • The Michael Ivankovich Guide to Selling Household & Estate Coins
  • The Michael Ivankovich Guide to Selling Jewelry
  • The Michael Ivankovich Guide to Selling Precious Metals: Scrap It? Sell It? Or Auction It?
  • The Michael Ivankovich Guide to Selling Silverplate
  • More Gold & Silver Articles Coming Soon

Michael Ivankovich, GPPA, MPPA
Personal Property Appraiser

P.O. Box 1536 * Doylestown, PA 18901
Office: (215)-345-6094 * Cell: (215)-264-4304

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