With all the talk and news reporting these days about scandalous gold buying practices, we thought we’d take a moment to demystify the process for you.
Gold is a commodity, and the base value of any piece of jewelry starts with the value of the precious material – metal and stones that it is made from – with some special pieces, there are additional layers of value added- rarity, exceptional craftsmanship and antique value sometimes come into play.
We are in a time of financial upheaval and resettling. Metal prices are volatile, household incomes are volatile. As a result, many jewelry shops are offering gold buying services as a way for people to turn their unwanted jewelry into needed cash. In the process of determining a bid, there are several steps that should ALWAYS be taken.
1) The gold content of your pieces should be individually tested. 14 karat gold is 58.5% pure gold, with the balance being other metals that are alloyed with the gold in order to improve durability, alter the color (to white or rose gold, for example), and also to decrease the manufacturing cost of the item. 18k is 75% pure gold, and 10k is only 41.6% pure. This is one reason an ounce of jewelry will not get a scrap bid equivalent to the price of an ounce of gold… that second number is for an ounce of pure refined material.
2) Once your pieces have been tested and grouped by karat (gold content), they should be weighed. Some jewelers use ounces, some prefer pennyweights (one twentieth of an ounce), some use grams. These are all matters of personal preference, and are all equally accurate systems.
3) Using the above steps, the actual amount of pure gold in your items is calculated. If you are considering selling some scrap items to a dealer who does not use a scale and calculator, you should take your items and leave.
Now for the trickier parts. Gold needs to be refined before it can be reused. Refining costs money, and those fees are subtracted from your bid. Testing, weighing, and calculating takes an employee’s time, that is also factored into the bid. Now for the trickiest part. By Oregon law, scrap purchases need to be held for 30 days before refining, and refining itself takes time. Who knows what direction gold prices will move over the next several weeks? Reputable jewelers are going to build a cushion into their bid to help ameliorate the gambling element inherent in such a transaction! As mentioned above, this is a service we are providing, and as a business, we can’t afford to loose money every time we provide it.
Yes, this is a way we make a little money too, but not a lot. What is so scary, and making headlines, is that some businesses are bidding so little for your gold, that when you question the bid, they have room to automatically double it! Others are offering coupons for 20% “higher” bids… You shouldn’t need a coupon to get a fair price for your gold.