During 2009 gold prices reached new record highs. What will happen in the weeks and months ahead is just about anyone’s guess but what is certain is that ‘selling gold’ has been a big topic for some time and is likely to remain so.
Legal Issues
In the USA for many years the private ownership of gold was in fact illegal.
Today the regulations are more relaxed meaning that the private buying and selling of gold is now much more straightforward, though there are a few things to keep in mind.
In what follows we’ll be talking primarily about private individuals who have modest amounts of gold for sale. If you’re thinking of becoming a precious metals trader then both State and Federal laws may apply. You’ll need to research those depending upon the nature of your specific business.
For the ordinary person dealing moderate quantities, you will be obliged to keep track of your transactions for possible tax reasons but things should be relatively easy. It is though worth checking your local State government as in some, such as Michigan, you may find that local laws apply constraints on what you can and cannot do.
Gold Values & Purity
The first thing to realize is that any gold you own may have a value that varies upon a number of factors:
- Age – some antique gold may be extremely valuable by virtue of its age alone
- Rarity – some solid gold coins have values out of proportion to their size and weight because they are rare
- Names – a gold item of jewelry may have a value not related to anything other than the fact it was made or retailed by a famous name such as CHANEL
- The weight – in terms of crude precious metal valuations, your gold will have a basic intrinsic value that is directly related to its weight and this is sometimes called its ‘scrap value’
- The markets – the price of gold in terms of its dollar value per ounce (or gram) will vary as the markets go up or down
- Its purity – this is a slightly complicated subject and is discussed further below.
Pure gold in theory is defined as being 24carats / karats. In other words it’s about 99.9% pure gold.
At this purity level, gold is in fact far too soft to be of much practical use in many applications. It often has to be mixed with other essentially base metals to give it sufficient hardness to be worked into things such as jewelry etc. It goes without saying that the purer your gold is, the higher value it is likely to be all other things being equal.
Carats / Karats
Over the centuries, different countries and different cultures have used different legal standards to define what can or cannot be called ‘gold’. This has led to the carat or karat system (the ‘K’ is more commonly used in the USA) to describe its purity value.
The most commonly seen values today are: 9k, 10k, 14k, 18k and 22k.
To use 9k as an example, this means that the item contains 375 parts per 1000 of gold or in other words, it is only 37.5% gold. In many countries it is illegal to describe an object being only 375 as ‘gold’.
In the USA 10k is the minimum legal definition and 14k is also commonly seen. In many European countries (outside of the UK where it is 9k) the legal minimum is 18k.
The higher the ‘K’ value, the higher then percentage of gold the item contains and the higher the price per ounce your item will be sellable for.
Selling For Merit Value
If you have an item of gold, you can sell it based upon certain attributes. If it is an antique item, a fashionable piece of jewelry or if it carries a famous maker’s name, you may do better trying to sell it on those facts and selling directly. This may also apply to coins.
You can try an online site such as EBAY but make sure you specify a reserve for more precious items to protect your interests.
If it is sufficiently valuable, you could try and sell it through an auction house in your hometown but remember that they will charge you a seller’s fee.
It’s worth keeping in mind that if your item is damaged then this may reduce its value considerably in terms of it being a ‘desirable collectable’.
Selling For Base Or Scrap Value
If your item doesn’t come into any of the above categories, you will probably have to sell it for its weight value on a scrap basis. These prices change regularly and sometimes dramatically.
You can check the current market prices on the Internet but try to keep in mind that prices vary by purity and you’re unlikely to get the basic market rates anyway.
Selling Through A Postal Operation
Recent years have seen an explosion of companies offering ‘cash by return of mail for your gold’.
Of course any company has to make a profit and such companies will get their margins by paying you less for the weight of your gold than its theoretical value on the base markets. Before you scream ‘foul’ – it’s worth remembering that your gold to them isn’t worth what you may think. To make it saleable as scrap they’ve got to melt it down, refine it to remove impurities and then sell it again. That process costs money!
Selling via the Internet
You can put your unwanted or scrap gold up for sale on sites again like EBAY. This is a gamble but you may end up with a better price than that offered by some major ‘cash for gold’ dealers.
Selling To A Jeweler
Some jewelers also buy scrap gold or surplus gold items. It’s very hard to predict what price you’ll get but it may be worth asking around – it won’t cost you anything!
To Keep Or To Sell?
That is very difficult! The basic idea is to buy when prices are low, store, then sell when they’re high. For much of 2009 prices have been exceptionally high and in theory it looks like a good time to sell.
There’s no certain answer to this. On the Internet you can find gold price statistics and some projections/predictions. Good luck!
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