Selling Gold and Platinum Jewelry for the Melt Value

[psadmin]

There is a new article on Pricescope journal by Wink Jones.

“Selling Gold and Platinum Jewelry for the Melt Value” - Help for Consumers

http://journal.pricescope.com/Articles/63/1/Selling-Gold-and-Platinum-Jewelry-for-the-Melt-Value.aspxhttp://journal.pricescope.com/Articles/58/1/“Appraise-the-Appraiser”---Help-for-Consumers.aspx

I want to thank him for his contribution to the Pricescope community.

Andrey
PS Admin

 

[John P]

Thanks for the experienced perspective Wink.

The rise of precious metal value has created a buy-sell rush and there are people who have a lot of old jewelry around. I'll never forget the story you told about the lady who came into your office a few months ago carrying boxes of the stuff. It was a nice payday for her. Reading this piece could help those who are thinking about selling.

 

[strmrdr]

50% is very common here unless you have a couple pounds.

Word of warning if you have gold, silver or plat coins or 22-24k bars or 99+% plat bars or 99%+ silver you can get spot minus a small commission at a min.
Some coins are selling for over 3-4 times spot.

edit: some rare coins may be over 100x spot also.. know what your are selling!

 

[isaku5]

Date: 9/18/2008 10:12:02 PM
Author: strmrdr
50% is very common here unless you have a couple pounds.

Word of warning if you have gold, silver or plat coins or 22-24k bars or 99+% plat bars or 99%+ silver you can get spot minus a small commission at a min.
Some coins are selling for over 3-4 times spot.

edit: some rare coins may be over 100x spot also.. know what your are selling!

I''m not familiar with the term "spot". Is it by any chance the price of gold on a given day?

 

[strmrdr]

Date: 9/18/2008 10:46:31 PM
Author: isaku5

Date: 9/18/2008 10:12:02 PM

Author: strmrdr

50% is very common here unless you have a couple pounds.


Word of warning if you have gold, silver or plat coins or 22-24k bars or 99+% plat bars or 99%+ silver you can get spot minus a small commission at a min.

Some coins are selling for over 3-4 times spot.


edit: some rare coins may be over 100x spot also.. know what your are selling!

I''m not familiar with the term ''spot''. Is it by any chance the price of gold on a given day?

The term spot is usually used for this is actually the average daily spot price.
Which is a average of all trades on a specific board that day.
London is commonly the one used NY is another.

Spot varies every time a sale is made a small amount usually and is impractical for small deals.

 

[WinkHPD]

Date: 9/18/2008 11:10:48 PM
Author: strmrdr

Date: 9/18/2008 10:46:31 PM

Author: isaku5

Date: 9/18/2008 10:12:02 PM


Author: strmrdr


50% is very common here unless you have a couple pounds.



Word of warning if you have gold, silver or plat coins or 22-24k bars or 99+% plat bars or 99%+ silver you can get spot minus a small commission at a min.


Some coins are selling for over 3-4 times spot.



edit: some rare coins may be over 100x spot also.. know what your are selling!

I''m not familiar with the term ''spot''. Is it by any chance the price of gold on a given day?

The term spot is usually used for this is actually the average daily spot price.

Which is a average of all trades on a specific board that day.

London is commonly the one used NY is another.


Spot varies every time a sale is made a small amount usually and is impractical for small deals.

In my experience, when I call a gold dealer and ask for spot I am quoted the price I can sell or buy for at that second. I did a deal a few weeks ago with a large amount of gold after the smelt and when quoted a price called my client to see if she wanted to lock the price now or wait to see if gold went back up. She decided to lock and when I called him back the spot had gone up $0.10 per ounce in just the few minutes since I had last talked with my refiner.

When we talked she asked me what to do. I told her honestly that I thought for sure the sun would go down that evening, and up the next morning, and that the odds were pretty good (50 - 50) that what ever we did would be wrong in the short term.

Sure enough the next day gold was up $10, but within the next few days after that it was down $80. Now it is up a bunch over what we sold it for, what a roller coaster ride!

Wink

 

[strmrdr]

Date: 9/19/2008 10:27:56 AM
Author: Wink

In my experience, when I call a gold dealer and ask for spot I am quoted the price I can sell or buy for at that second. I did a deal a few weeks ago with a large amount of gold after the smelt and when quoted a price called my client to see if she wanted to lock the price now or wait to see if gold went back up. She decided to lock and when I called him back the spot had gone up $0.10 per ounce in just the few minutes since I had last talked with my refiner.


When we talked she asked me what to do. I told her honestly that I thought for sure the sun would go down that evening, and up the next morning, and that the odds were pretty good (50 - 50) that what ever we did would be wrong in the short term.


Sure enough the next day gold was up $10, but within the next few days after that it was down $80. Now it is up a bunch over what we sold it for, what a roller coaster ride!


Wink

It all depends on who you are dealing with and where in the chain you and they are and how much you are selling.
Typically here when its a small amount and its just going to be thrown into the scrap bucket and sold when they get enough to send to the refiner and the price is right the average daily is used.
When the bucket full is sold then it will be sold at that second spot price.
10oz is often the min. to get better prices from the refiner so they will wait until they have that amount to sell it unless the market is really volatile.
When I was helping out in a friends pawn shop he would sell direct to the refiner when he had the min. weight when the market was stable but sell to a jewelery store that day if the prices were swinging around a lot to reduce his risk.

 

[WinkHPD]

Date: 9/19/2008 11:14:18 AM
Author: strmrdr

Date: 9/19/2008 10:27:56 AM
Author: Wink

In my experience, when I call a gold dealer and ask for spot I am quoted the price I can sell or buy for at that second. I did a deal a few weeks ago with a large amount of gold after the smelt and when quoted a price called my client to see if she wanted to lock the price now or wait to see if gold went back up. She decided to lock and when I called him back the spot had gone up $0.10 per ounce in just the few minutes since I had last talked with my refiner.


When we talked she asked me what to do. I told her honestly that I thought for sure the sun would go down that evening, and up the next morning, and that the odds were pretty good (50 - 50) that what ever we did would be wrong in the short term.


Sure enough the next day gold was up $10, but within the next few days after that it was down $80. Now it is up a bunch over what we sold it for, what a roller coaster ride!


Wink

It all depends on who you are dealing with and where in the chain you and they are and how much you are selling.
Typically here when its a small amount and its just going to be thrown into the scrap bucket and sold when they get enough to send to the refiner and the price is right the average daily is used.
When the bucket full is sold then it will be sold at that second spot price.
10oz is often the min. to get better prices from the refiner so they will wait until they have that amount to sell it unless the market is really volatile.
When I was helping out in a friends pawn shop he would sell direct to the refiner when he had the min. weight when the market was stable but sell to a jewelery store that day if the prices were swinging around a lot to reduce his risk.

These things are true. Normally when I buy it goes into a bag until I have at least 5 ounces. (I have a great refiner and an even better relationship) When dealing in larger amounts, 1 pound or more of scrap I will normally send it for smelting to determine the actual weight of the gold. The last thing you want to do is lock in 20 Ounces of gold at $800 and only yeild 16 ounces at $700. You then owe the refiner the difference in what he bought and what you delivered. Much better to either get the gold smelted for the exact amount, or be very conservative, lock in the 20 Ounces at $800 and deliver 22 Oz, then you get the money for what you locked and an additional settlement for what you delivered at the current price.

We do not buy much compared to the pawn shops and others who advertise it. We normally just buy from our local clients when they talk to us about it. I wrote this article because of some of the redicules things I saw happening with the TV and Hotel buyers.

Wink

 

[oldminer]

Because of a very active buying market in our area, we are fortunate to have a few buyers who only work with dealers who do pay above 90% of melt. This means that if the shopper-seller does a good job of finding a high paying dealer that they will do rather well in comparison to many other parts of the country. There are way too many fly-by-night "buers" who are glad to offer way too little to unsuspecting sellers.

Wink, your article is excellent. THANK YOU

 

[isaku5]

Date: 9/18/2008 11:10:48 PM
Author: strmrdr

Date: 9/18/2008 10:46:31 PM
Author: isaku5

Date: 9/18/2008 10:12:02 PM

Author: strmrdr

50% is very common here unless you have a couple pounds.


Word of warning if you have gold, silver or plat coins or 22-24k bars or 99+% plat bars or 99%+ silver you can get spot minus a small commission at a min.

Some coins are selling for over 3-4 times spot.


edit: some rare coins may be over 100x spot also.. know what your are selling!

I''m not familiar with the term ''spot''. Is it by any chance the price of gold on a given day?

The term spot is usually used for this is actually the average daily spot price.
Which is a average of all trades on a specific board that day.
London is commonly the one used NY is another.

Spot varies every time a sale is made a small amount usually and is impractical for small deals.

Thanks very much to Karl and Wink for the explanation and examples

. It sounds very much like the commodity and (money) exchange markets.

 

[Garry H (Cut Nut)]

to Wink

 

[strmrdr]

Date: 9/19/2008 12:01:53 PM
Author: Wink
I wrote this article because of some of the redicules things I saw happening with the TV and Hotel buyers.


Wink

Its an excellent article, thank you.
The only real addition I saw needed was the warning about coins and bars and the actual value.
A friend of mine took some Eagles to one of the Hotel type deals and a few people that advertise in the paper just to see what they would offer and it was 50% of spot on coins that were selling for well over spot to collectors.
I don''t want someone reading the article and saying hmmmm I have some gold coins that belonged to uncle Joe and I could use the money and get ripped off.
It is outside of what your were writing about but closely related so I see why you didn''t cover it.

 

[WinkHPD]

Date: 9/20/2008 2:19:07 AM
Author: strmrdr

Date: 9/19/2008 12:01:53 PM
Author: Wink
I wrote this article because of some of the redicules things I saw happening with the TV and Hotel buyers.


Wink

Its an excellent article, thank you.
The only real addition I saw needed was the warning about coins and bars and the actual value.
A friend of mine took some Eagles to one of the Hotel type deals and a few people that advertise in the paper just to see what they would offer and it was 50% of spot on coins that were selling for well over spot to collectors.
I don''t want someone reading the article and saying hmmmm I have some gold coins that belonged to uncle Joe and I could use the money and get ripped off.
It is outside of what your were writing about but closely related so I see why you didn''t cover it.

Two reasons. One, it was outside the area that I was writing about, and although closely related I did not even think about it. (That is my truth in advertising story and I am sticking to it!)

Two, I really know nothing about coins. It is not an area of my expertise, so when my client brought me in several pounds of gold a few weeks ago and it included some jewelry with coins in it, I sent all of those items to a friend of mine who is in the coin business.

He identified several coins that were worth only the melt, some that were worth more, even though they had been put into jewelry and worn, and one that was a complete counterfeit that would have been worth more than melt had it not been counterfeit.

For a Journal article I think it ethical to only write about things that I know about, and I accept your comment that this is similar enough to have been included as a valid point, if only I knew something about the coins to fairly and accurately say.

I will say this, I believe that I emphasized this in my article, but just in case let me emphasize it again. Find out about who you are dealing with, check them out through the BBB and chamber of commerce and ask others who know them what they think, then deal with someone that you feel you can trust, and just for sure, you must know that this will NOT be the Hotel or TV buyers. Their expenses are simply too high for them to give you fair value.

Wink

 

[WinkHPD]

Date: 9/19/2008 2:14:46 PM
Author: oldminer
Because of a very active buying market in our area, we are fortunate to have a few buyers who only work with dealers who do pay above 90% of melt. This means that if the shopper-seller does a good job of finding a high paying dealer that they will do rather well in comparison to many other parts of the country. There are way too many fly-by-night ''buers'' who are glad to offer way too little to unsuspecting sellers.

Wink, your article is excellent. THANK YOU

Thank you for the kind words my friend!

Wink

 

[WinkHPD]

Date: 9/20/2008 2:13:21 AM
Author: Garry H (Cut Nut)

to Wink

Wow, from Garry that is high praise indeed. Thank you.

Wink

 

[Rosa]

Hi Wink,

That was extremely interesting - thanks so much for taking the time to explain the system. I don''t have any gold to scrap, but I was very curious about this statement:

"My friend in the refining business tells me that on the coasts, gold marked 14kt tends to run in the 54.5% - 55.5% pure instead of the 58.33% that it is supposed to be, and that in the heartland it does in fact tend to be closer to the 58.33% that it is supposed to be."

Did your friend give a reason? How would a jewelry buyer know? (I live on the East Coast, which is why now I am wondering if my 14k and 18k items really are as marked.)

Thanks!

 

[WinkHPD]

Date: 9/22/2008 11:57:28 PM
Author: Rosa
Hi Wink,

That was extremely interesting - thanks so much for taking the time to explain the system. I don''t have any gold to scrap, but I was very curious about this statement:

''My friend in the refining business tells me that on the coasts, gold marked 14kt tends to run in the 54.5% - 55.5% pure instead of the 58.33% that it is supposed to be, and that in the heartland it does in fact tend to be closer to the 58.33% that it is supposed to be.''

Did your friend give a reason? How would a jewelry buyer know? (I live on the East Coast, which is why now I am wondering if my 14k and 18k items really are as marked.)

Thanks!

Yes, he did.

On the coasts there are more competitors, and many of them have made their niche being the cheapest on the block.

When you are the cheapest on the block you must find ways to increase your margins while appearing to provide quality or you will not make the massive sales that you need to survive the redicules premise that you can provide quality for nothing.

Since the public generally will not be able to test the karatage of the gold one of the easiest ways is to underkarat your goods. The fact that this is a Federal offence does not deter since the Feds have a notoriously bad record for this type of crime, they have "more important" crimes to pursue.

I forget if it was in the 80''s or 90''s when there was a sting in the Los Angeles area in which many wholesalers and stores selling gold chain were found to be selling goods that were severely underkarated. Chains marked 14kt were as low as 8 and 9 karat. Vast quantities were confiscated. I forget the details, perhaps someone with a better memory than mine can give us more details or find it in Google. There were then, and there are now, manufacturers who will accept gold from a client and stamp it what ever they asked to stamp it when it is finished.

Many retailers accept chain or other finished jewelry from a company like this and never have a clue that their goods are underkarated. If they, like their clients, are looking only for the best deals, then they will often forsake quality for price, never understanding that they are actually getting even less than what they paid for.

Since this type of dicount retailing is more rampant on the coasts, this is where the problems most often occur. While it would not make sense or be profitable for a small merchant, when you underkarat by even one karat and are selling thousands of ounces per month, then it becomes very profitable, and the temtation becomes huge for these dealers.

Wink

 

[Rosa]

Date: 9/23/2008 8:13:38 AM
Author: Wink
I forget if it was in the 80''s or 90''s when there was a sting in the Los Angeles area in which many wholesalers and stores selling gold chain were found to be selling goods that were severely underkarated. Chains marked 14kt were as low as 8 and 9 karat. Vast quantities were confiscated. I forget the details, perhaps someone with a better memory than mine can give us more details or find it in Google. There were then, and there are now, manufacturers who will accept gold from a client and stamp it what ever they asked to stamp it when it is finished.

Thanks, I looked it up and found the website of the "Jewelers Vigilance Committee" - http://www.jvclegal.org/index.php?categoryid=57 where they give a history of their accomplishments.

You were right about both the 80''s and 90''s:

1982 JVC forms a Monitoring Committee to "assure compliance" with the law. Its first goal is to check for violations of the National Stamping Act. Within months (early in 1983), it announces that 20% of the gold jewelry it buys and samples falls below legal tolerances on gold content. It receives written assurances from half of the offending manufacturers that they''ll discontinue the practice.


1997 In Project Mall, JVC uses private investigators to buy hundreds of pieces of l0k gold jewelry at more than 100 stores and kiosks in 74 malls in 13 states. London''s Goldsmiths Hall determines that most is underkarated; many don''t carry trademarks. Following JVC warnings, further research finds about 80% of the guilty stores now comply with the law. At least five major manufacturers of jewelry, all based in the United States, are implicated based on information from the retailers.

 

[Rosa]

Also, Pricescopers - you can get your metal tested by the JVC:

The Jewelers Vigilance Committee offers non-destructive x-ray testing for precious metal content for the purpose of providing quality assurance and monitoring compliance with the National Gold and Silver Stamping Act and the FTC Guides for the Jewelry Industry. Each screening costs $20.00 plus postage and handling.

Full info is here: http://www.jvclegal.org/index.php?categoryid=19

 

[kimkaler]

Hi ... saw this post and I''m wondering about 18K rose gold. I have a setting that''s about 3.5 grams. About what amount should I be able to sell that for? Thanks All

 

[glitterata]

Same as any other 18k gold. What makes it pink is the non-gold metals in the mix. 18k is a mix of 75% gold, 25% other metals.

 

[VRBeauty]

Wink -- that was very informative. Thank you!

Not too long ago I bought a gold watch from a pawn shop. I paid for it and then left it at the shop so their jeweler could adjust the extender. When I finally took posession of the watch and really examined it closely, I was shocked to see that the clasp was stamped 14Kp! It looked to me like a solid gold band, and the shop owner and I talked about it being solid 14 K rather than plated, but... had I just spent $400 for a gold plated watch?

When I went back to ask about it of course I was told that the 14Kp stood for "14 karat plumb" -- or, exactly 14 karat. The pawn shop owner patiently explained that the mark came about because of investigations showing that much of the 14K used in mass produced jewelry contained less than 14/24 parts of pure gold. I've guestimated my watch to date back to the 1980's, which fits in with the JVC investigations you mentioned.