SELLING YOUR GOLD AND SILVER

Precious metals prices have been on a tear for a while and as a result, plenty of places seem to be buying and selling. Even Costco is offering gold bars online and according to no less than the Wall Street Journal, they are flying off their digital shelves.  Whether or not to buy physical gold is up to you but if you are thinking about selling some gold (or silver), here are some things to consider in order to get the best price possible.

Knowledge is power and before you approach a gold buyer, I strongly suggest you do your homework and get a good handle on what your gold is worth beforehand. This isn't hard to do and the steps you need to do are presented below. What you will need to know is 1) what kind of gold you have, 2) how much it weighs, and 3) what the spot price is on the day you are going to sell. Once you have that in hand, you are ready to do some simple math and learn your gold or silver's value. 

In my previous blog post, I covered the marks you need to find to determine the purity of your gold, which will have a large bearing on how much you are going to get for it. Here, though, is a quick recap: Most gold is done in levels, these being 22K, 18K, 14K, and 10K. Typically, gold will either be marked in this way or with a number that represents a percentage of 24K, which is pure gold. 18K gold may be marked, for example .750, which is 75% of 24. Often times gold marks are tiny and hard to find so I recommend having a good magnifying glass on hand and also being patient. Marks that indicate a piece is not gold include "rolled gold", GF (gold filled), and "gold plated". Silver will typically be marked "Sterling", .925, .800, or "coin". If you see "EPNS" or "EP", that means silver plate and thus little to no value. One note: British silver is often marked only with hallmarks. The key mark will be a striding lion with one paw in the air, which is the hallmark for sterling silver. 

Once you know your item's purity, it is time to weigh it. Gold and silver are measured in troy ounces, which complicates things since a troy ounce weighs more than a standard ounce. The easiest thing to do is just skip all that and weigh your gold and silver in grams. You can get small jewelry scales on Amazon for very little money but you can also use a digital postal scale. Just make sure you have the scale set to "grams" before weighing it.

The next step is to find out the current price of gold/silver. Gold and silver prices fluctuate constantly and are keyed to what is called the "spot price". This is something that you can quickly find by simply googling "gold spot price in grams today" and instantly you will see a variety of metals-related websites that will display the current price in grams up to the minute. You can even specify "14K gold  spot price in grams" if you want to skip some math. For silver, you will just be looking for the sterling spot price in grams.

At this point you are ready to do your value calculation. You simply will multiply the number of grams you have times the spot price and that is your full value, also called the melt value. Now, will you get that? No, you will not... the metals buyer needs to make a profit so you will be receiving a percentage of the melt value. That percentage will vary between buyers and be sure to ask the question right up front: "What percentage of melt value do you pay?" If you are not getting at least 80% of melt value, then my advice is to head elsewhere. Currently, the fellow to whom I sell estate gold and silver pays 92% of melt for gold and 85% for silver, which should give you a decent point of reference. Also, when you do elect to do business with a metals buyer, insist they weigh the items in grams like you did. Don't let them wave around troy ounces, pennyweights, or any other unit of weight... get it in grams so there is no room for misunderstanding.

Here is a sample calculation:
You find that the spot price of 14K gold is $44.50. 
You have 12 grams of 14K gold. 
$44.50 x 12 = $533.33, which is your full melt value.
Buyer is offering 85% of melt value, so you get: $533.33 x 0.85 = $453.33

By doing this math ahead of time, you can walk into any buyer's store and know immediately if something is off if their calculation is dramatically different from your own. 

Note: if your gold item is a piece of jewelry and there are semiprecious stones, understand that these stones will have no value and will likely be discounted from the total weight of the piece by the metals buyer. 

Lastly, do the obvious homework and google whomever you are thinking of doing business with before walking in their door. If they are dealing less than fairly, it will likely show up in their reviews and thus will save you a trip (and, potentially, a lot of money).

Happy selling!
Bryan Roberts