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Payment for Gold Jewelry Gold Scrap Selling Precious Metals

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What you need to know before you sell your precious gold jewelry.

The first thing to know is that you should not expect to get near the "retail" price for the scrap jewelry you want to sell. However, you should expect to get somewhere reasonably close to the "spot" price of gold it is worth. By "spot" price, I mean the daily quote of the price of gold (per troy ounce) that you can find on CNBC TV or on the internet. Below, I'll tell you where to sell and where NOT to sell your material if you want the best return. I'll also tell you how to calculate the approximate amount of gold your jewelry can be expected to have.

First, determine the Karat quality of your items. (You may want to acquire a "loop", a small jeweler's magnifier, to aid you in seeing the fine markings.) Generally, sellable gold pieces should be marked somewhere on it with: "14K" or "585" (for 58.5% gold); "10K" or "4167" (for 41.67% gold); "18K" or "750" (for 75% gold). Pieces with "GEP", "GP", or "EP" beside the karat marking mean the item is gold plated and of negligible gold value. Items marked "GF" or "gold filled" next to the karat mark mean gold filled - a thin skin of gold over a base metal - and have some value for scrap, but only a fraction of a full karat piece, mentioned above.

If the piece is not marked, or you want to verify it, you can take it to a trusted jeweler or coin dealer for a "nitric acid test". In this test, a small notch is filed into the piece and nitric acid is applied. If it turns green, there is no scrap value to the piece. If it turns brown, the piece is likely 10K. If there is no color change, it is 14K or higher. A "touchstone" test may then be required to determine how much higher the gold content is.

Next, you need to weigh the piece. Best results are obtained with a scale that accurately measures in grams, (not pounds or ounces), like the Ohaus "triple beam balance". If you do not own or want to purchase one, take your items to a trusted jeweler or coin dealer to have them weighed in grams.

Once the gram weight is determined, you do three calculations. 1) Divide the gram weight by 31.1 to determined the total weight in fractions of troy ounce units. (There are 31.1 grams per troy ounce. Troy ounces are not to be confused with avoirdupois ounces - the latter being only 28.38 grams.) 2) Then, for a 10K piece, multiply that figure by 0.4167 to get the actual gold "melt" value of your piece. This is the actual amount of pure gold it should contain. For a 14K piece, multiply the figure in number one, above, by 0.585 to get the pure "melt" value. For an 18K piece, multiply the figure in number one by 0.750. 3) Finally, you determine the approximate gold value of the piece. Take the figure in number two, above, and multiply it by the present gold spot price.

Let's do an example. You have a 14K wedding band that weighs 6.7 grams. You divide 6.7 by 31.1. The result is 0.2154. You multiply 0.2154 by 0.585. The result is 0.1260. This figure is the fractional amount of an ounce of gold the ring contains. Now you multiply that figure by the going spot price that day. Let's say gold is $900.00 per troy ounce. Multiply the figure by 900. 900 times 0.1260 equals $113.40. That should be in the ballpark what you should get for the ring.

In this way, you should calculate the value of each piece (or the total of all the pieces) you want to sell. Have that figure recorded before you present it to anyone for buying.

Now, who do you sell it to:

Do not sell it to the following types of dealers:

1. Companies that advertise in papers about meeting in hotels for a few days to buy your precious scrap. These are crooks that pay only cents on the dollar of worth and should be outlawed.

2. Pawn shops. Almost ditto. They may be a tad better but only desperados sell scrap to them.

3. Coin dealers. Though they generally pay much better, yet, these dealers can vary all over the map in payouts. Its better to sell coins to them than precious scrap. Coin dealers, too, have to sell scrap to a refiner to get their top dollar. So why not you, directly to a refiner? More on that below.

4. Online "bullion" sites. Some of the biggest ones may be honest, but you still won't get your top dollar. Why? Because, even bullion dealers must sell to a refiner to have bullion made (unless the dealer is also a refiner). Hence, the bullion dealer is still a middle man.

Now, that I've stated where not to sell, where do you sell?

To a precious metal refiner, thats where. Precious metal refiners exist in many states, Pennsylvania, Michigan and Texas, being only a few examples. When you have located one, request that it mail you a bank reference. That is the kosher way all honest parties do business in these unsettling times.

Your best source for a refiner is your local dentist. I found mine that way. Most dentists have a buyer for the scrap silver and gold dental material they work with and accumulate periodically. The dentist may point you to a refiner that they deal with.

When you have your refiner lined up, always send your material by registered, insured mail. Do not use mailers that the post office has not insured. This way you can trace it and have recourse if the shipment is lost or not received. Note also, all refiners charge a small material processing fee which is their expense in refining your material. But this should be not more then 5% to 15% of your "melt" gold value. Additionally, you have to figure your shipping cost for registered mail.

A last note of caution: If there is any question in your mind that your gold jewelry piece contains precious gems, a signed name or an art style (antique or contemporary) that could have value well over the gold content, you should always, first, consult with a good appraiser of fine jewelry before you deliver the piece to a refiner's fire. Though, not very common, there are testimonials of fine valued jewelry pieces that could have been lost to obscurity had it not been for PBS TV airings like "Antiques Roadshow".

More about this author: Jeff Franklin

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