We've all seen those ubiquitous ads promising high payouts for junk gold jewelry. From the testimonials (are those people really customers?), you'd think all you had to do would be to send your unpaired earrings and claspless chains to the scrap buyers and be rewarded with oodles of cash.
Reality is often a lot different from late-night TV, however. Lots of people are left disappointed with their proceeds, feeling they were undercompensated for their jewelry's gold content. More often than not, the frustration arises from a blind reliance upon the scrap buyer's protocols. The dealer typically doesn't disclose how it figures your gold's worth until it is in the dealer's hand and most likely melted.
Not to worry. Herein, we'll explain how the payout for Aunt Sophie's necklace is figured. We'll also point you to those who'll pay a fair price for scrap gold, and, for those of you interested in converting jewelry into an investment asset, how you can get paid in bullion rather than cash. Just think of this as a continuation of the education we offered in "Precious Metals: I Can Get It For You Wholesale."
First things first, though. You need to know just how much gold content you actually have to sell.
How Much Gold?
The first step is to sort through your hoard and parcel out the jewelry by karat fineness. Jewelers often mark the goods with stamps indicating the metal's gold content. Look for markings such as "10k," "14k" or "18k." The higher the karat designation, the greater the percentage of gold. Remember, you'll only be paid for the jewelry's gold content, not for its gross weight.
Solid ten-karat (10k) jewelry contains 41.67 percent gold; a 14k piece is 58.24 percent gold and there's 74.88 percent gold in 18k jewelry. (These figures are for solid, not plated pieces; there's a lot less gold in plated jewelry.)
If you don't want to rely upon the jeweler's mark, or if you can't find a mark, you can gauge fineness with a tester. The Mizar ET18 Gold Tester, through a two-chemical process, can indicate 10k, 14k or 18k fineness within seconds. Now, the tester sells new for about $100, so you have to consider whether your gold stash justifies the cost.
Next, establish a reference price for your gold content. Kitco Metals (www.kitco.com) offers real-time prices online for gold bullion. Keep in mind that gold is priced in troy ounces, a unit of measure equal to 31.1 grams or .9114 avoirdupois (standard) ounces. If bullion's trading at $1,200 per troy ounce, the gram price would be $1,200/31.1 = $38.59 and the standard ounce price $1,200/.9114 = $1,316.66.
You'll next need to weigh your sorted piles (10k, 14k and 18k groupings) on a postal or gram scale to determine their actual gold weight.
For example, if you've got a heap of 14k pieces weighing 20 grams, multiply your gram weight by the gold content ratio (58.24 percent, or .5824) to derive its price basis (20 x .5824 = 11.65 grams). Thus, today's value of that gold would be $449.50 ($38.59 x 11.65). Repeat this process with the other karat allotments to arrive at the total value of your hoard.
If you've got 10 grams of 18k jewelry, for instance, you've got $288.96 (10 x .7488 x $38.59) worth of gold to sell. A 30 gram lot of 10k pieces would be worth $482.41 (30 x .4167 x $38.59).
Between the 14k pieces, the 18k pieces and the 10k pieces, you now have 31.637 grams of pure gold content to peddle, worth, at best, $1,200.87. Now, what can you actually get for it?