When I first started in the antiques and auction business, I knew that gold was valuable but I didn’t know what it was worth, or what to do with it. I didn’t have a trusted advisor who could teach me the secrets of buying and selling gold. To make things worse, there were predators waiting in the shadows. I spent my weekends picking estate sales and garage sales looking for old jewelry, but I didn’t know how to identify the gold, or where to sell it. I had to learn most of this the hard way. Here is what I learned about buying and selling scrap gold.
What is scrap gold and where do I find it?
Scrap gold is usually jewelry that is ready to be refined and recycled. It can include: broken jewelry, damaged chains or a single earring. But not every piece of 14 Carat gold you find should be refined. There are times when it makes sense to repair and restore pieces of old jewelry rather than melt them down.
For years, I had a client that would bring me the ugliest and dirtiest scrap gold I had ever seen. It was always black, crusty and mashed together. I asked him “ Where do you find this stuff?” His answer surprised me: “The sewer!” He was cleaning out sewer drains and traps in large apartment buildings. I’m glad that he sterilized it before he brought it in!
There are much better places to search for scrap gold than sewer pipes. You can probably find some scrap gold at home right now: Did you lose an earring three years ago, and never find the match again? Perhaps you’ve been hiding the “ex-boyfriend” jewelry in the bottom of the jewelry box? It’s also important to look through any boxes of costume and fashion jewelry and make sure that there isn’t any gold jewelry mixed in.
Identifying hallmarks on gold jewelry
Hallmarks on solid gold:
- Carat weight hallmarks: 10K, 14K, 18K, 22K, 24K
- Gold purity in millesimal fineness: .417, .585, .750, .916, .999
- Here is a conversion chart for you reference
- 14KP stands for 14 carat plumb.
Common Hallmarks (Not Solid Gold):
This is Gold-Filled. It still has some value as costume jewelry (don’t throw it away) , but it isn’t solid gold. I see this on a lot of Victorian bracelets and pins.
This one fools a lot of people. It’s Fourteen Carat Rolled Gold Plate. Plated pieces can’t be recycled or refined. I find a lot of fashion rings with this stamp on it.
Unmarked gold jewelry, is it solid gold?
Sometimes you have a piece of old or broken jewelry and you don’t know if it is solid gold. There are several tests you can do at home to determine if you have solid gold or not: The first test should be with the strongest magnet you can find in the house. I use a strong rare earth magnet, and you can find inexpensive examples for sale online if you want one. Run the magnet over the group of gold jewelry and see if any of the pieces stick to the magnet
Be careful here: Sometimes there are tiny steel springs in the clasps of bracelets and necklaces. These will be attracted to the magnet, even though the rest of the chain could be 14k gold! If the body of the piece sticks to the magnet, it’s not gold. Set it aside because it may still have some value in your costume jewelry box.
A magnet isn’t the only way to sort out your scrap gold from real or fake. Another method of testing is using an acid test. The gold piece is rubbed on a touchstone and some of the metal is left behind. Then Aqua Regia (A mixture of calibrated nitric and hydrochloric acid) is placed on the mark. The reaction determines the carat weight of the gold. This test is effective with scrap gold or damaged jewelry, but it can leave a mark where it was rubbed on the stone. One of the best methods for testing is an XRF analyzer or X-Ray Fluorescence Spectrometer. This is a non-destructive method for measuring the amount of precious metals in a sample. The machine is very effective, but it is expensive and is just gaining popularity in the precious metals business.
Once you have separated the carat gold from the non-gold, it is helpful to sort it by carat weight. Put the 10k in one bag, 14k in another, etc. The next step is to weigh it.
How to weigh your scrap gold:
Precious metals like Gold, Silver, Platinum, and palladium trade on the markets by the Troy Ounce. This can be confusing because a troy ounce weighs more than a postal or customary US or British Ounce. A troy ounce is easily divided by 20 pennyweights (abbreviated as dwt). This is the method I use because it calculates quickly and by an even number. The other method is by the gram. This method is perfectly acceptable, but I need the calculator a little more: there are 31.1035 grams in a troy ounce. I’ve read some complaints that gold sellers were confused by the method of measurement that a scrap gold buyer uses. There isn’t a special theory behind using either method of measurement. Go ahead and use whatever method you like, and weigh both prior to selling your gold so that you know your pre-sale weight in pennyweights and grams. But keep in mind that Tory Ounces and Standard US ounces are different by about 9%. If you only weigh with a home postal scale, your numbers are going to be off.
If you plan on buying and selling scrap gold more than once, get a decent scale. If you’re a beginner and just looking to try this out, there are some very inexpensive scales on amazon that will work fine, and they are accurate. If you want something a little more advanced, get a scale with a larger maximum capacity, longer battery life, and the ability to quickly switch between units of weight.
Write down your measurements for each carat, weigh the gold and write on the bag. Now that you’re sorted and weighed, how much is it worth?
What is my gold worth?
The market price of gold (also called spot price) changes every few seconds while markets are open. Daily and weekly market trends will affect the value of scrap gold. The amount that a scrap gold dealer will pay varies based on a lot of conditions. Expect a reputable dealer to pay 80% or better for good clean gold under a few ounces. The payout for high carat gold, wearable gold, and collectible coins is usually higher. Essentially, expect a better deal for more volume and better quality items. Most local dealers have to follow local laws and precious metals regulations. These laws sometimes require that merchandise is held for a period of time, and that sellers provide proper documentation at the time of sale. These regulations can affect the price that a dealer is willing to pay.
Quality matters: High grade gold coins, designer jewelry and gold bars with collectibility are worth more.
Calculate what you should get for your gold
Carat Weight Conversions:
- Pure gold (24K) = .999 fine
- 22K = .916
- 18K = .750
- 14K = .585
- 10K = .417
Is it better than scrap gold?
There is a perception that precious metals dealers are just going to melt down every piece of gold that they come across. It’s true that some gold buyers throw everything into the melting pot and that’s unfortunate. I don’t believe in melting every piece of gold jewelry that I buy. With a little work and time, it’s possible to bring back old and pieces of estate jewelry and turn them into something for the next generation. The key is to evaluate the piece and determine the costs associated with restoration and repair. Sometimes, a piece is damaged beyond repair. Maybe you lost one of the earrings. Maybe the stone fell out of a ring and was never found again. Then it’s time to refine. That gold will go back into the cycle and come back out as a bullion bar, or a computer, or a new engagement ring.
Where do I sell my scrap gold?
Finding a reputable dealer to sell your gold can be challenging. Here in Connecticut there is a gold buyer every few towns. Sometimes they set up shop across the street from each other and put signs out by the road: “We pay more for your gold” or “Highest price paid!” How is it possible for two shops to both pay the highest prices? Even if you went back and forth with competing offers, they would ultimately both go out of business! I have looked at these signs for years and always wondered why the sign never said “Honest Prices Paid” It’s always been that simple to me: Pay an honest price for honest service.
Without being in the business, or setting up a refinery account, is it possible to get the most money for your scrap gold? The short answer is: yes, but you have to do the work. Take your scrap gold to more than one place, and get multiple quotes. You will be shocked at the different amounts buyers and dealers offer.
There are several important things to consider when choosing a reputable gold buyer:
- How does this business advertise? Television ads are expensive. If the company you are looking at has a large advertising budget, they have big bills to pay at the end of each month. They are paying for the ads, by paying less for your gold!
- Does the dealer have a good reputation? A business with a physical address, and a stake in the community will be more likely to treat you fairly. Read reviews online and ask your friends and family for recommendations. I am a big fan of using professionals with good reputations for any service.
- Is the transaction transparent? Will the buyer you choose show you the numbers and give you an itemized list of the gold you are selling and prices paid?
Checklist for selling Scrap Gold:
- Inspect and identify
- Sort and Weigh
- Estimate Value
- Ask for recommendations
- Choose a reputable Buyer
- Get multiple quotes
Cash for gold by mail:
I’ve never been a fan of this method. There is something very important about sitting down at a desk and being able to see and touch the items being bought and sold. I think that the social cues coming from the person buying your merchandise are very important. If you sit down to an honest transaction with five gold coins, and decide not to sell, you can walk away with five gold coins. But if you mail your gold to a company in another state, who knows what will happen? It could get lost, damaged or stolen. What if you have a dispute with the buyer? Will you get your items back? You need a personal buyer who will take the time to show you what is gold, what it is worth and how much you will be paid for. When you mail your gold to a stranger, who knows what will happen?
Cash for gold at home parties:
When the price of gold goes up, I always hear about cash for gold parties and fundraisers. This sounds like a fun time with your friends, or maybe a good fundraiser for your organization. But please beware! I have heard horror stories about “Cash for Gold” parties:
A client brought me a one-ounce Vienna Austrian gold Philharmonic coin for appraisal. These are beautiful bullion coins and in addition to the gold value, collectors are building sets and collecting specific dates. This is a good example of a collectible bullion coin. I examined the coin and it was uncirculated, housed in a nice holder and carried a value above spot price. As I examined the edges, I noticed something strange. There was a portion of the edge rubbed away! I asked the client about the mark and they explained that it was taken out of the holder at a cash-for-gold party held at a friends house. The buyer removed the coin from the holder and rubbed it on a touchstone to test the purity of the gold! This person damaged the coin and brought the value down instantly. To make matters worse, the buyer only offered half of the current market value. When the seller brought the coin to me, I was able to offer a higher price, but it would have been higher if the coin wasn’t damaged.
Payment for scrap gold:
When you are finished and you have agreed to a price, it’s time to get paid. In the state of Connecticut (and in Berlin) gold buyers are required to pay using a check. Gold buyers and pawn shops are not allowed to pay you actual cash for scrap gold. Also, bring your Photo ID. I am required to keep good records of all transactions.