Cash for Gold - Sell Your Old Gold for Cash - Scam or Not
Cash for Gold - Sell Your Old Gold For Cash - Scam or Not?
These days you can hardly move for adverts to sell your old gold. They're on the TV, radio, in newspapers and online. Gold - do you know how much it is worth?
But is it a scam? Why would they want to buy your old gold for cash?
To answer this, we have to look at:
- Why sell your gold?
- Why sell your gold now?
If you are selling gold to these advertisers, then they will usually send you a bag to wrap it up in, this will contain your details. You simply put the gold you are selling into the bag and send it off to them. Once they receive it they will then weigh each item and check how much gold it contains.
They will then look up today's gold price and pay you per gram of gold.
To understand how much cash you will get for selling your gold, you need to understand how it works.
Pure gold is 24ct/24kt or carat/karat. Your old gold will not be made from pure gold, very few things are made of pure gold because it's simply too soft. Gold is therefore mixed with other metals to harden it and give it its colour. You can get white gold, yellow gold and rose gold - they are all gold, just mixed with different metals.
If an item is gold, then it will be stamped with a special mark called an assay mark, this assay mark will tell you what the carat value is.
In the UK, typically jewelry will be classified as 9ct gold or 18ct gold. In the US and other countries it tends to be 14kt.
The amount of gold in your jewelry is the carat number as a percentage of 24 parts. So 9 carat gold contains 9 parts of gold in 24, or 9/24ths, 37.5%. Seeing the number 375 stamped onto a ring will indicate that it is 9ct because the 375 represents 37.5%, or 375 parts in 1000 are gold.
18 carat gold contains 18/24 parts gold, or 75%, often shown on a hallmark as 750.
So, as you look at your old gold, you will be able to sort it into purity. Most people's gold is either 9ct or 14kt.
How Much is the Gold Worth?
How much your gold is worth changes every minute of every day - just by a little bit. Over time it can change a lot. Sell when the price of gold is high; buy when the price of gold is low!
The Value of Gold
Gold has been traded for thousands of years. It is traded daily on the stock exchanges in various countries. The cost of gold goes up and down daily, but twice a day the current value is written down and that is the "spot price". When you are selling your gold, you will be paid based on the spot price of the gold that day, the day the company open your package and weigh your gold out.
The value of gold goes up and down over time - the chart shows the price of gold from 1968 to 2008.
As you can see, the price of gold has really taken off in recent years and right now, for many, it's the only way to get their hands on almost instant cash. If you sell your old gold now, you'll be getting a lot more for it than in most years gone by, so if you are just sitting on it waiting to get round to it, then now is a good time to consider selling your gold, but I guess that's why you're reading this!
Why Are They Buying the Gold?
Gold is what is known as a commodity. Once they have bought your old jewelry they will melt it down and separate out the pure gold, then turn it into gold bars, which will then be sold again.
There is a limited supply of gold, so when it's in short supply, people will pay good money to buy it. Jewelry companies need gold to be able to make new jewelry to sell in their shops, if they can't buy gold they have no business left.
Gold is used a lot in many businesses, for wiring and connectors for example. Again, these companies HAVE to buy gold in order to make their products.
So the old gold you sell is bought at the current price, melted and resold to companies who make goods with the gold.
Calculate the Value of Your Gold
To calculate how much your gold is going to be worth, you will need some accurate weighing scales and to know how pure your gold is.
Weigh Your Gold Accurately
It's worth investing in a set of micro weighing scales so you can weigh your own gold before you sell it, quite simply because if you're going to sell it down your local High Street then you need to be sure they're telling you the right weight and so you know how much they're actually offering you, compared to the online gold buyers. Just one simple gold necklace could vary in price so much between two local jewellers that the scales will pay for themselves just because you're sure you're not being ripped off.
Simply find out today's spot gold price, weigh your jewellery and multiply the spot gold price by the weight in grams then multiply by the purity.
e.g. if today's spot gold price were $10 and you have a 9ct gold bracelet weighing 3.2 grams, the calculation would be: $10 x 3.2 * .375 = $12
The explanation of this is that gold is worth $10/gram, your bracelet weighs 3.2 grams but it isn't pure gold, it is only 37.5% gold. If it were pure, 24 carat gold, it would be worth $32, but the gold in it is only 375 parts out of 1000, or 37.5%. So it's worth 37.5% of $32, which is $12.
Remember, if you are selling a ring that has a stone in it, then the weight doesn't include the stone, which makes it trickier as you have no idea how much the stone weighs.
Sell Your Old Gold for Cash - a Scam?
It is not a scam. However, that is not to say that scams may occur within the industry. If you are sending your gold off to a company you have never heard of, then you need to do due diligence to check who they are. For starters, you could look at it this way:
- How long have they been in business?
- Is there a phone number on their website?
- Is the website well made (scammers could have a nice looking website, but real gold companies will never have a bad one)
- Are they advertising in reputable places? TV adverts I'd trust, most common Internet adverts I'd trust, but I'd shy away from a 3-line small advert in the back of a shabby leaflet.
- Make sure you know how much they pay per gram before you send anything off to them. How does their price compare to the current price of gold and their competitors.
- Do they offer you your items back if you're not happy with the valuation?
- What's in the small print?
So, you just need to check them out a little and be confident. If you're sending the gold off to a Cash for Gold company, make sure you've followed their instructions, written your name legibly, stuck the envelope down securely. Just basic common sense things really!
Jewelry With Stones In
When you send your jewelry off to companies who buy gold for cash, if they've got stones in them then what they will do is remove the stones and pay you for those too if they're precious stones. There is no value in semi-precious stones, or simply costume jewelry.