Cash for gold
---June June 13, 2010---
The Great British Rip Off.
Iím have recently been getting quite annoyed at the cocky nature of many of these people who buy gold from an innocent and unsuspecting public. Some dealers I met actually liked to boast about how little they offered for old gold jewellery and the tricks they used to persuade their customers they were getting a good deal.
The big advantage for these traders is that most people selling their old gold have absolutely no idea of how much it is really worth and so feel obliged to accept whatever they are offered.
I recently took a sovereign down to the gold buyer in a Westfields shopping arcade and was quite insulted when he offered me £100 and also tried to make me feel like he was doing me a favour. At current market prices a sovereign contains almost £200 of gold and, bearing in mind that the dealer could have scrapped it in Covent Garden for about £194 a fair price would have been somewhere between £150 and £170. But as most people donít know how to calculate the true worth of a sovereign, these dealers donít feel any need to offer anything but the lowest they think they can get away with. (When showing the sovereign I did do my best to appear as if I knew nothing at all about the worth of a gold sovereign)
So, how much is your old gold worth?
Most jewellery is 9 carat which means it is 37.5% pure and calculating its gold value is quite straightforward. Forget about the complications of Troy ounces instead of Imperial ones, itís all quite simple if you think only in grams.
Start by weighing your jewellery on a modern electronic kitchen scale. If you donít have one borrow one from a friend. An electronic scale will tell you the weight of your jewellery in grams and having established this, itís just a question of translating those grams into pounds sterling.
First step is to go to www.kitco.com and at the bottom of the page you will see the price of gold per Troy ounce in several international currencies including British pounds. At present itís around £840.
To find out how this price, say £840, translates into price per gram simply divide the figure by 31.1035. This will give you the price of gold per gram but as your jewellery is nine carat or only 37.5% gold, you have to multiply this figure by .375. (point three seven five.)
Having established the price of nine carat gold per gram all that remains for you to do is multiply that figure by the number of grams your jewellery weighs and you have the true value of your jewellery's gold.
Once you know this figure itís simply a case of getting the best price you can. 70% to 80% of what you calculated could be considered a fair price so itís a question of going from dealer to dealer until you find one who will give you an amount you consider reasonable. Dealers have to make a profit and to be honest I think a 20 to 30 percent mark up is fair but that trying to make more is unfair.
Knowledge is power so make sure you know the worth of your jewellery before trying to sell it. (For jewellery which contains diamonds and other precious stones the best course of action is probably to have it officially valued for insurance purposes, which is the full retail price, and then try to get about half of that valuation. However, at the moment the market for jewellery is quite weak so you might have to accept less.)
Calculating the gold content of a sovereign is quite simple. Simply multiply the price of gold per ounce by .2354 (point two three five four) and youíll know your sovereign's current market value. (You'll still have to subtract the dealer premium.)
14 carat gold jewellery is 58.3% pure and is likely to be American.
22 carat is 91.6% percent pure.
Thursday June 17th.
It has come to my attention that some of the smelters in Hatton Garden are willing to buy gold from members of the public provided they have a reasonable amount, say 10 grams or more. Consequently, if you can make the trip to London you can get 97% of gold's current price for your gold jewellery.
Make sure you go to a smelters and not to one of the jewellery shops, bring two pieces of identification and also remember that smelters often run out of cash by late morning so you may have to accept a cheque.
Remember also that because smelters work on such small profit margins they depend on turnover and don't suffer fools gladly. They are certainly not interested in dealing with people who are going to waste their time. So if you have a mixture of gold make sure you pre-sort it before handing it over and also, if possible, remove any valuable stones from any jewellery you are selling because gold smelters won't pay anything for stones, not even diamonds.
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---June June 13, 2010---