Buying scrap jewelry and junk gold from consumers has come to represent big money for a number of different business models. From pawn shops to coin dealers and jewelry stores, it's hard to drive through most cities without passing several signs advertising the service. If you choose to sell off your scrap gold to one of these buyers there are a few facts you need to be aware of first, so that you can be sure you're getting the right price for the weight in gold you're selling.
Know Your Karats
The karat value assigned to anything made of gold denotes the volume of gold used in its composition. Pure gold, rated at 24 karats, is too soft to use in jewelry, so that broken necklace or old ring is likely to be 18 karat gold or less, which contains 75% pure gold, with the remainder made up of equal parts silver and copper. In the US, any item sold as "gold" must have a value of 10 karats, or will need to use a different label to denote a lower total gold content.
When attempting to identify the karat value of an item you can often start by looking for engravings. Jewelry makers typically place the karat mark on the inside of a ring's band, or on the clasp of bracelets, necklaces or watches. If you're selling a piece of jewelry for the value of its gold content, this will help you better understand the reasoning for the price you'll be offered for it.
What is "Under Spot"?
When selling gold, the price you're quoted is typically the result of deducting the cost of operating from the current market price, or the spot value. The spot price changes from day to day, but the percentage being deducted from it should not. How far under spot a buyer operates will give you some idea of how far removed they are from a jewelry maker or other end user. The more steps between gold buyer and jewelry buyer the greater the reduction in the spot price.
Finding the most reasonable price isn't always a function of finding the highest dollar amount, as not every gold buyer updates their pricing daily. Unless you're dealing directly with a refinery or smelting facility, don't expect better rates than 40% under spot. This will allow you to do your own calculations, based on market value and karat rating, and determine the price you'll be offered for your gold.
Whether you're cleaning out an old jewelry box, or combing through local yard sales, selling scrap gold can be fairly lucrative for the average individual. Once you know what to expect and how to arrive at a figure on your own you'll be able to spot a good deal when you see one. You'll come away with more money in your pocket and spend less time shopping your gold around to different buyers.
To learn more, contact a company like Rocky Mountain Gold & Silver Exchange.