Gold for Cash
Either way, if you don’t have to use them right now, don’t. I’ve said it before, and I’ll say it again here in mid-July 2013. While we are still mired at the bottom of this rather protracted correction in the gold price, if you don’t have to sell right now – meaning, unless you need the money – then wait till prices get higher before you sell gold for cash.
We’re going to take a quick look at what happens in one of these little “We Buy Gold for Cash!” shops and then you can decide.
You’ve seen the commercials, you’ve read the ads, you see the shops and the sign twirlers on the corner so you know that there is a market where you can sell your gold for cash. So who are these gold buying businesses? Who buys gold like this? Well, the bottom line is that these are business people who see that there are very good profits to be made here. Some of them have been doing this for years. Many of these have been running jewelry stores and see this as another profit stream. Others have just popped up out of nowhere working out of storefronts or even out of hotel rooms for weekend appointments.
The folks who run these businesses are scrap gold buyers. The scrap gold prices today depend on a couple of things: First, the current spot price of gold, and second; the scrap gold value – the quality of your gold (see The 24K Gold Price). When they get your gold, what do they do with it? If it’s an exceptional piece, they may try to resell it. If they can get more for “scrapping” it, they’ll do that instead. Scrapping, of course, means melting it down, or taking it to a refinery who will pay the cash for gold guy and then the refiner will melt it. Check out the Gold Refinery article to learn more.
Selling Gold for Cash
If you’re intent on selling scrap gold, here’s what’s going to happen. First off, before you get in there, you need to know exactly what you’ve got in your hands. Know the grade of your gold, because if you don’t, the buyer might tell you and might not be entirely honest with you. [Check out our article on The 24K Gold Price for a review of your grades of gold.] Know that you’re only going to be paid for the gold content. Design, age, rarity, beauty, stones – none of it makes any difference to the buyer. That’s why you’re selling gold for cash. It’s the gold that matters.
Another thing to keep in mind is, unless you need the cash that minute, don’t take the first offer that you get. If you’ve got the time, shop around. That first price is a baseline. Go to other establishments (there are plenty around). Check with reputable jewelry stores who may be buying gold for cash. Go online and check Yelp or other websites for reviews. You will run into shops who will barter. They may try to throw a lowball offer at you and then raise the offer – making some excuse or another like market fluctuation – when you say you’ll shop around. Some shops will match an offer, so get offers in writing if you can. You might think that determining your gold value should be pretty simple, but oftentimes, the people running these types of shops have only been doing this a short while. Some of them have taken only a quick course and are far from expert. If you go to several shops, you’ll more than likely receive differing valuations. So don’t be surprised by that. Also, don’t be surprised that each of these shops are going to want to pay you as little as they can for your gold. For this reason, be prepared for a very low number. These establishments make their money on the margin. They’re going to try to buy your gold for one half of what they can sell it for.
The number and popularity of these shops have been waning. Some say it’s because of the drop in the gold price, but in actuality, these types of operations were declining in number even before then. I can tell you though, when the price of gold starts to take off again, you’ll see them coming out of the cracks ready to feed on whatever scrap gold you want to hand them. Just make sure that you’re prepared before you meet with them. Make sure you stick with reputable firms: Don’t deal with the fly-by-night, hotel room, gold selling parties. Also, you probably want to avoid mail in businesses because you can’t get a second opinion once it’s in the mail.