- Personal Finance»
- Income & Making Money
Wait! Before You Sell Your Scrap Gold And Silver, Think About What You're Getting In Return
Got Gold? Many Would Like To Give You Cash For It!
Gold And Silver Are Hot!
Gold and silver are both on the rise. Inflation, out of control money printing, and investor concerns about mounting geo-political turmoil are all contributing to strong demand for precious metals. These reasons all factor into why gold has gotten back above $1,400 an oz. and Silver just made a 31-Year high. This is just the recent price action though. Both Gold and Silver have been top performing investments over the last decade. Gold was up 412.12% from the end of December 2000 to the end of December 2010. Silver was up 569.51% during the same period, but they say "a picture is worth a thousand words" so check out the amazing visuals (from http://www.mgsrefining.com/) of silver and gold prices soaring over the last decade.
Gold Price Surges From 2000-2010!
Silver Shoots Up Like A Rocket From 2000-2010!
Increased Interest Is Fueling All Kinds Of Offers For Scrap Gold and Silver!
As with any hot market there is allot of increased interest coming from investors, speculators, and other opportunistic parties. It's the third category of interest that I want to focus on in this article. Because of new demand from investors and speculators, supplies of both gold and silver have tightened up. This is where the opportunists have come into the market in a big way, recently. With tight supplies, offering cash to buy scrap gold and scrap silver at a discount (sometimes a steep discount!) to the spot price, and reselling to other businesses that use these metals, has become a profitable endeavor. These programs work like this. The company making the offer will give you cash for your scrap gold or silver, which could include things like jewelry, watches, silverware, plaques, or any other items containing the desired metals. They will then measure the quantity and appraise the true value of the metals contained in the items you have. They will then make an offer that is usually below the current market value and again as I pointed out, sometimes well below it. With the tremendous rise in precious metal prices and expectations of a continued up-trend, this is why cash-for-gold programs have been popping up all over the place in recent years.
Cash4Gold.Com Super Bowl Gold Offer!
Offers For Scrap Gold And Silver Advertised All Over The Place!
I have seen all kinds of advertisements for these types of operations. Among the ones that have caught my attention are flyers on my car, commercials, billboards, google adwords, and even a Super Bowl commercial spot that cash4gold.com ran in 2009 (more about this later). Some of this marketing comes from small business startups, some are pawn shops, and some are fly-by-night places looking to make some quick money off of the recent bullish trend in precious metals. I have also noticed, more recently, that established and well known jewelry chains are starting to set-up and advertise their own cash-for-gold programs. In fact just a couple of weeks ago, I received an e-mail from a well known national jewelry chain, offering cold hard cash for any scrap gold I would be willing to sell them. So with all of these offers on the table, it forces the question, should I sell my scrap gold or silver? Should you?
Things To Consider Before You Cash In Your Scrap Gold & Silver
There is no black and white answer to whether one should cash in their scrap gold & silver. Some people may be desperate and need the cash badly to pay important bills like grocery and house payments. For them it may indeed be the only option. However, here are some definite factors that one should consider before jumping on the bandwagon of selling precious scrap metals for cash.
Is The Amount Of Money You Receive Really A Fair Price?
One important thing to consider (even for those who are cash strapped & desperate to get the cash for bills) is whether you are being offered a fair amount of money compared to the value of the scrap gold or silver you are going to be selling. Though it has become a popular way to get some extra cash in your pocket, the cash for precious scrap metals companies are not all the most reputable operations. In fact many are vultures, looking to take advantage of desperate people who have no idea about the true value of their gold & silver. This allows them to purchase gold and silver for literally pennies on the dollar. Even well known operations are not above these kinds of tactics. Take Cash4Gold.com which I have already mentioned is a well funded enough operation to hire celebrities like MC Hammer to do a Super Bowl spot. This Inside Edition report is a very revealing look at the cut throat tactics that these operations use to get a good deal on your treasures.
Is Cash For Scrap Gold & Silver Really All That!
Don't Just Take Any Low Ball Offer For Your Scrap Gold & Silver
Basically most of these places will try to low ball you if they can, so it is very important to do your homework and shop around, if you plan on selling.
Do You Really Want Cash For Your Scrap Gold Or Silver?
Another consideration and probably the most important, is to think about whether actually exchanging scrap gold & silver for cash (US Dollars) is even a good exchange? In fact it is probably true (my opinion) that those who don't really need money right now, should probably not Cash in their scrap metals. Especially not gold and silver scrap metals. As I noted earlier gold and silver have both been on tear over the last decade. What about that cash in your pocket or those US dollars you have in the bank? Can the same be said about them? Did your paper money increase in value over the last 10 years. Of course the answer would be a definitive no! After waging multiple wars in the Middle East (with others still under consideration), expanding healthcare under both Bush and Obama, big bank bailouts, stimulus, and growing entitlement spending due to unfavorable demographics, the US Dollar has been looking very sickly over the last decade. This USD Index chart(dollar weighted against other major currencies), shows just what I'm talking about.
The US Dollar Has Been Weak The Last Decade!
Think About It! Gold And Silver May Not Be Worth The Cash You Are Offered!
Of course everyone is aware of this if they just take the time to think about it. Commonly imported items ranging from fuel, food, clothes, etc. are all up over the last decade. Sure, looking backwards doesn't tell us what's going to happen going forward, but I would be willing to bet that the people who will be better off over the next 10-15 years will be the ones converting cash into gold and silver, not the people selling these metals at a steep discount. Paper money is being printed on whims right now and government spending shows no sign of any real shift towards a balanced budget. This is not good for paper money, but it is bullish for precious metal prices. Also think about the jewelry companies, pawn shops, cash for silver & cash for gold operations who are making these offers. Are they implementing this business plan, because they think gold and silver will be dropping anytime soon. No, likely just the opposite. They want to get their hands on gold and silver at a discount to today's prices, because they are expecting prices to continue going up and they know there will be good money to be made!
Check Out Some More of My Thoughts On Gold And Silver At These Links: