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.
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.
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.
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.
are several key factors that must be considered when valuing gold.
fineness of the gold.
weight of the gold.
spot price of the gold.
percentage of spot price that gold dealers will actually
is a 5-step approach to understanding "How the Scrap Gold
Game is Really Played".
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.
gold is 75% pure gold, and 25% base metal.
gold is 58.3% pure gold and 41.7% base metal.
gold is 41.7% pure gold and 58.3% base metal
that 10k is the minimum legal karat-age allowed to be called
"Gold" in the U.S.
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.)
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
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.
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
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.
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".
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.
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.
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.
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.
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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.
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.