Promises of “cash for gold” are everywhere, but when it’s time to sell your gold, it pays to be careful, well informed, and not too greedy. Sure, you want a lot of money when selling your jewelry and other items, but you have to be realistic. Finding someone to buy your items won’t be hard, but getting good prices takes time and planning. And if you plan on making it big in the business, you’ll also need to know how to invest in gold. When you want to sell gold, know what you have, know what it’s worth and know what to expect.
“Your aim is to get as close as possible to the raw ‘melt’ value, both when you buy and sell gold,” says Adrian Ash, Head of Research for Bullion Vault, a gold trading and storage firm based in London. The melt value is the value of gold in your piece if it were melted down and sold as bullion. These tips will help you get a good price when selling coins, bars, jewelry and stock.
Know What You Have
For most people, owning gold means jewelry. However, selling jewelry based only on the gold it contains might not be the best approach. When you sell jewelry based on just the current gold price, it won’t take into account the craftsmanship, beauty or sentimental value of your item, or other gems and precious metals it might contain. When selling these pieces, try a jewelry shop that takes used items, or try selling them online at eBay or another site. Just make sure that wherever you choose to sell them, the seller offers you fairly good and current prices.
Gold coins are another commonly sold item. Selling these is a little trickier than going to your local jewelry
shop. The first step is to determine whether they are gold bullion coins—basically, gold minted into coin form—or numismatic coins. Numismatic coins are rare coins that hold special interest for collectors, and their value is based not only on the gold they contain but also their rarity, condition, demand and year of mintage. So keep in mind the type of coin that you have before you try to make a sale.
The American Numismatic Association can help you find a reputable dealer to evaluate if you should sell your coins. They will help you determine a price so that you’ll know whether it might be more valuable as a collector’s item, rather than strictly for its gold.
Selling gold bullion—in the form of small bars or government-issued coins—is fairly straightforward because they come in standard weights and purities; therefore the current prices should be easy to find.
A bar will be stamped with a number that indicates its
purity—either .999 or .995. You may even have a certificate of
authenticity from when you bought it. You may want to include that
certificate when selling bullion.
Selling coins produced by a government mint can be somewhat easy because they come in standard weights, such as 1-ounce, half-ounce, or quarter-ounce so you can quickly determine the prices. The purity is also standard; the American Buffalo and the Canada Maple Leaf, for example, are .999 while the American Eagle and the South African Krugerrand are .917.
Purity, or fineness refers to the amount of actual gold in a coin, bar or piece of jewelry. When selling bullion, you’ll need to know the actual amount of gold for sale because that will determine the prices at which you can sell the items. If it is less than 24 karats, or 999 parts per thousand, it means it has another metal alloy mixed with it. For example, if it's eighteen-karat gold, it means the gold is 750 parts pure and 250 parts alloy per thousand.
The best way to sell jewelry is to first separate it into groups based on purity—14 karat in one pile, 18 karat in another and so on. Then you can weigh the pieces together and know what amount for sale.
When you want to sell gold that’s old jewelry and other scrap metal—dental fillings or crowns, nuggets, or electronic components—you might not know the weight and purity. A local jewelry shop can help you by weighing the pieces on a scale, and testing the purity with a substance called aqua regia.
When selling bars, coins or other valuables, make sure the clerk weighs your pieces in front of you, and if you don’t trust their scale, test it yourself. Weigh a nickel on the scale. U.S. nickels always weigh 5 grams. If the scale says anything less than 4.9 grams, walk away and find somewhere else to sell your bullion. You want to find the best prices possible, but you don’t want to go selling your items to buyers who won’t give you accurate prices.
Know the Current Price of Gold Today
Now that you know the weight and purity, check the “spot price” of gold per troy ounce at Kitco.com or Bullion Vault.com to find the current prices that match your items. The spot price is the price for delivery of physical gold, which in this market is two days from the trade date.
A troy ounce is the standard weight in which gold is quoted in the international market, equal to 31.1035 grams. Less commonly, you might hear about a unit of measurement called a pennyweight. There are 20 pennyweights in a Troy ounce.
The center of the world’s wholesale gold market is London. If you want to get in this business, you’ll need to pay close attention to the wholesale gold market. The biggest bullion banks are located here and twice a day they meet to set a market price to clear their outstanding orders. This is called the London Fix. This current price is used in other transactions throughout the day. Members of the fix meet at 10:30 a.m. and 3 p.m.
The price per ounce fluctuates constantly, so expect some variation up until the point when you actually make a sale. With pure gold—24 karats or .999 purity—simply multiply the weight of your item by the current price of gold. With other purities, multiply by the appropriate percentage.
- 22 karats: 91.7%
- 20 karats: 83.2%
- 18 karats: 75%
- 16 karats: 66.6%
- 14 karats: 58.3%
- 12 karats: 50%
Several websites also offer online calculators that automatically pull in the latest prices, making the process very easy. You may want to look around before you actually sell your items to ensure that you’re getting the best prices available.
Know Where to Sell Gold for Cash
The World Gold Council offers a list of reliable dealers around the world that will give you accurate and current prices for your coins, bars and jewelry. Before you sell, you should also check the Better Business Bureau. They can help you find the best place to sell gold—a coin shop, metal refinery or jewelry store—with a clean reputation. Do not, no matter how tempting, use a “mail it in” service that offers you cash for your gold if you ship it to the company in one of their envelopes. Some people think this is the best method because it’s easy and you don’t have to go anywhere. However, these services are notoriously bad with their stingy compensation so don’t mail it in; sell it elsewhere instead.
When trying to make a profit, experts also warn against “cash for gold” buyers who set up shop in temporary locations, such as hotel rooms. They often won’t give you the accurate and current price. Make sure you only deal with a reputable buyer and not a fly-by-night operation when you sell your coins and bars.
When selling coins or other types of gold, you can find a dealer at a coin store, a jewelry shop, or a gold-only business. Call around to several dealers and ask them what they would pay you per gram, and go for the dealer that gets you the highest percentage of the “melt value.” It’s possible that a larger business might be able to offer more, since they deal in large volumes of gold, but that’s no guarantee. The best approach is to make a few phone calls ahead of time.
You can save on shipping costs and insurance by selling your items close to home. And less experienced sellers may appreciate the guidance of dealing face-to-face with an expert. “You want to find a coin store with some ornery old fart who’s been doing this for 40 years,” says financial advisor Michael McGowan, author of “Financial Foghorn’s Guide to Gold.”
Selling online has become popular in recent years. Online dealers and auction sites like eBay are a popular option. You may get a better price. Follow the usual precautions when you buy and sell gold online: Don’t ship it until you have the money in hand, and check the buyer’s record.
A recent trend is gold parties, in which someone invites several friends to their home and a dealer is there to make offers on the guests’ gold. The host then gets a small cut of the dealer’s business. Experts say this is a reasonable way to sell your items, as long as you’ve done enough research to know you’re getting a good price. Beware of social pressure to sell your gold before you feel ready, and check the dealer’s business record ahead of time.
Dealers won’t give you the full price of gold today—they’ve got to make a profit, after all. How close you get to the piece’s full value depends on what type of piece you have, how much you have to sell, and which dealer you decide to work with. Different dealers offer different percentages, which is why it’s important to do your research first. Jewelry doesn’t get much better than 70 percent, but if you sell bars or coins it gets closer to 90 percent.
When to Sell
Learning how to invest in gold is different than learning how to invest in other forms of money. Although the old investing chestnut—“buy low, sell high” —also applies to precious metals, this type of investing isn’t about short-term gains. Gold is actual money, not a paper or electronic representation of money. So even when the world’s financial markets are in dire trouble, gold still has value; hence why learning how to buy and sell it is so popular. The price of it today may be high, but experts advise you to hang on to it for as long as possible.
As of early 2011, gold had been in a bull market for more than 10 years. “In 2001 you could have spent around $60,000 on one share of Berkshire [Hathaway] stock, or bought 200 ounces of gold,” writes Richard Smith, a gold dealer at Coin&Stamp Gallery in Phoenix, Arizona. “The Berkshire share [on Jan. 25, 2011] traded around $124,000, while the 200 ounces of gold now would net you some $266,000.”
Of course, although we know the price of gold today, it’s impossible to predict the future. But McGowan says signs of a peak in prices would include increased participation in the selling market, long lines of people waiting outside coin stores to buy it, and high price-to-earnings ratios for mining companies.
You should check out market intelligence reports from the World Gold Council to help you understand trends and the impact of the price of gold today. Smith also offers regular market analysis columns about the current price at OnlyGold.com to help you further understand how to invest in it.
Gold Accounts, ETFs and Other Options
Now that you know how to sell bullion, you may want to know how to sell gold accounts or ETFs. If you have a gold account—where a bank stores gold for you in a secure vault somewhere—you can sell it without the hassle of checking weight and purity, or shipping the bars or coins somewhere. A simple phone call is all it takes to sell it from those sources. But again, when learning how to invest in it keep an eye on the current price and only sell when you have to.
If you have shares in a gold ETF (exchange-traded fund) or in a mining company, you would sell these as you would sell any other investment on the stock market—through an online account or through a stock broker. It should give you the current price of gold today.
Prepare for a Tax Hit
Before you start looking into where to sell gold, and determining standard prices, you should consider how you’ll be taxed after making a sale. Gold is different from other investments. It doesn’t fall under the usual capital gains tax rate. The Internal Revenue Service will consider physical gold, or an ETF that is backed by physical gold, a collectible rather than an investment.
When you learn how to buy or sell gold, you should also consider how long you plan to own it for. If you sell it before owning it for a year, the amount you sold it for is looked at as ordinary income. If you own your gold for more than a year before selling, the money will be taxed at the rate of 28 percent—rather than the 15 percent rate at which most stock market investments are taxed.
Now that you know how and where to sell coins, bars, jewelry, accounts and more, you can start putting your prized metal up for sale. The gold selling business will take some time to understand. Doing your research and making a few phone calls to check prices before selling your gold could add up to hundreds of dollars in your pocket.