Selling Gold and Precious Metal Jewelry

Jun 10, 2013
An inside look at the process, prices and tips for sellers.

By Nancy Stacy, GG, ASA, Master Gemologist Appraiser
 
Bagging up their old jewelry, bits and scraps of gold and even gold teeth, people have been flocking to jewelry stores, pawn shops, gold buying shops and gold parties to cash in on the high price of gold. The price of fine (pure) gold per troy ounce was around $300 in January of 2000. Between January and June of 2006 the price had risen above $600, by January of 2008 the price had risen above $900, it passed $1,200 by July 2010, it passed $1,500 by January 2011 and topped at $1,800 in July of the same year. During the first months of 2013, gold has fluctuated around the high $1,500’s per troy ounce.1
 
But many or even most people have not taken the time to learn the basics about sellingtheir gold, and that could mean hundreds or even thousands more dollars in their pockets. “Consumers have gotten screwed from the very beginnings of this” said Don Palmieri, ASA, in an article by Carolyn Said published in the San Francisco Chronicle. Don is President of the Gem Certification and Assurance Lab (GCAL) in New York and a Master Gemologist Appraiser with the American Society of Appraisers. “At some places the consumer is lucky if they get 15 to 25 cents on the dollar for their gold.”
 Palmieri has worked with the syndicated television news show “Inside Edition” on stories where its reporters went undercover to sell gold to mail-in companies, in hotel ballrooms and at gold-buying parties, which resemble Tupperware parties. They found that such venues pay far less than the gold is worth.
 “They’re just flat-out lying to people about the weight and purity. The bottom line is Buyer Beware, Seller Beware.”
 
Some tips for people selling gold:
Larger lots bring a better return than small ones because of shipping and refining expenses.
 Know what you have. Most gold is mixed with an alloy to harden it and make the ultimate item more durable. Although a surprising amount of jewelry is fraudulently marked and may have a base metal core, a good way to start is to sort out your items by type (gold, platinum, silver) and fineness. Fineness is the percentage of the gold as opposed to another metal that it is blended with such as copper or nickel.
 
Gold is very often marked with a karat (or carat in England) purity mark instead of or in addition to the fineness mark. Pure gold is 24 karat. Dividing the karat by 24 will give you the fineness. E.G. 18K divided by 24K =750 fine gold. Also be aware that sometimes you will see a mark such as 18K H.G.E., 18K G.E. or 1/20 14K GF. These items are not gold; rather they are gold plated.
 
Once you have separated your gold into piles by fineness you will want to weigh each pile, preferably in grams. You can then calculate the approximate value of each pile based on the current spot price of gold. This calculation will be explained in further detail below.
 
The buyer should test each item with a strong magnet to detect a base metal core and with acids or with an electronic tester to determine its fineness. Sometimes it is even necessary to bore a tiny hole to be sure no core is present. Be aware that before 1983 the US government allowed gold to be under-karated by 1/2 karat, so expect that on older items. Platinum, silver, and often gold are marked in thousandths of fineness. The decimal point may or may not be included in the mark. For example, platinum marked “950 Pt” or some variation is 950 parts pure platinum to 50 parts alloy, thus 95% fine. 14 karat gold may be marked 14K, 585 or 583. Figure 583 parts/thousand gold or 58.3% gold to be safe.

FINENESS MARKS YOU MAY SEE AND WHAT THEY MEAN
GOLD Fineness Purity Notes
  999 24 karat “carat” in UK
  958.3 23 karat Often used in Eastern jewelry
  916 22 karat Prevalent in the East & Mid-east
  750 18 karat Standard in Europe
  583 14 karat May be marked“585” in US
  500 12 karat Half gold, half alloys
  10 karat 10 karat Often used in class rings, etc.
  375 9 carat Not legally “gold” in US
PLATINUM 999 “three nines” Purest platinum
  995   Most common for bullion
  950   Most common for jewelry
  900 “one nine” Also common in jewelry
    Platinum is often also marked with notation of its alloy  
SILVER 999.9 ultra-fine Canadian Silver Maple Leaf
  999 “three nines” Used in bullion bars
  958   Britannia silver
  950   French “1st Standard”
  925   Sterling silver
  925 gold color “Vermeil”, gold plated silver
  900 “one nine” USA coin silver
1 g  0.32 ozt 0.63 dwt  0.352 avoirdupois ounce 

Weighing Precious Metals
Precious metals are weighed in Troy ounces (ozt). A Troy Ounce is about 1.10 times the weight of a “regular” avoirdupois ounce. It is equal to about 31.1 grams (think food scale) or 20 pennyweights (dwt). It is convenient to weigh your precious metals in grams on a food scale or a digital scale. Be sure that as you shop around you are getting all the quotes in grams or all quotes in pennyweights (dwt) so you can make meaningful comparisons. Once you have weighed each group of metal of the same fineness, you can figure the fine gold content by looking up today’s “spot price” (the current daily trading price) on www.kitco.com, and referencing the data above.
 
Example: you have two old 10K class rings you no longer want. They weigh 20 grams together. You find that today’s most recent gold spot price (either London or New York) is $1,750/ozt. There are 31.1 grams in a troy ounce, so dividing $1,750 by 31.1 tells you that pure gold is selling for $56.27/g. Checking the chart above, you see that. 10K gold is .417 fine, so multiply $56.27 times .417 to find that 10K gold is worth $23.46/g at $1,750 spot. Multiply $23.46 times 20 grams and you can see that the gold price for your class rings is about $469.20! However, there are selling costs so this is not the amount of money you should expect to get for your rings.
 
Anyone buying gold or other metals needs to make some profit in order to stay in business. They will also incur refining costs in recycling precious metals. While you should not expect to realize the full spot value of your metals, profit margins vary greatly. In the market today, you can get (but won’t always be offered) 75 to 85 percent of the precious metal content. So, at a minimum, you should be able to realize the spot price ($469.20 x .75 = $351.90 minimum for your two rings.) Refining costs for platinum and silver are higher. Figure .50 to 70% net for those metals.
 
Try it yourself: 
Here is your formula: Spot price divided by 31.1 = $/g pure; x fineness % = price/g x number of grams = full value of your items before selling costs x 75% for the minimum offer you should accept for gold. Let’s say today’s fine gold spot price is $1,580/ozt and you have 30 g of broken 14K chains. Run the formula, and then check the answer at the end of the article.
 
If you don’t care to do the math yourself, go to the website. Set the [weight type] to “Grams (g)” and the [purity] to match your item. Set the [Grams] to “1” and the [Profit/Loss] to “-25”. Multiply the result by the weight of your gold to see your minimum acceptable offer.
 
Upon testing, some jewelry may be under-karated—not all gold sellers are honest. On the other hand, some jewelry, such as designer items, may be worth more than the precious metal content. You may decide to engage the services of a professional appraiser to help you “triage” your precious metal jewelry. Researching for an accredited, independent jewelry appraiser is simple: go to ASA’s website, www.appraisers.org and do a “Find An Appraiser” search in the Gems and Jewelry Discipline using your zip code.
 
(Answer to quiz: $888.56)
 
—Nancy Stacy, GG, ASA, Master Gemologist Appraiser® is owner of Walnut Creek, CA based Jewels by Stacy Appraisals. Ms. Stacy has been a designated member of the American Society of Appraisers for more than 26 years and a member of ASA’s Gems and Jewelry Discipline and NorCal Chapter. Ms. Stacy may be reached at (925) 939-4367 or via email or click here to view her ASA “Find an Appraiser” profile.

1. Kitco. Multi-Year Gold Charts. Retrieved March 11, 2013 from http://www.kitco.com/charts/historicalgold.html.