Tips on Weighing and Selling Your Gold (Conclusion)
There is a method to the madness when it comes to selling your placer gold (and your junk or recovered jewelry). In this final post on the topic at hand I'll be giving you some tips on just how to sell your gold and get the best possible price for it.
A Profitable Enterprise
First off let me say this as a preamble to the core theme of this post. I've sold a lot of gold in my time. No, not the piles you see on those TV "reality" shows, but I've certainly sold my share of yellow (and silver too). To qualify things here please note that I've sold (or traded) a hell of a lot more gold and silver jewelry over the course of 40 years than I have placer gold. This fact may dismay some of you hard-core, small-scale gold miners out there (of which I am one!) but it's the truth none-the-less. You see, there's more gold to be found on popular beaches in one season than you're likely to find prospecting and mining in a year as a small-scale guy or gal. That's the hard truth of the matter. All through the 1980s I funded my mining efforts and associated gear and equipment by "mining" ocean beaches for gold. And without any false bravado or posturing, I literally kicked ass on Southern California beaches during that decade. In fact, much of the gold and silver bullion I still own came to me "free" this way. Just like gold mining, there's an art to working beaches for lost gold and it can be a very profitable enterprise if you know what you're doing and stay at it over time. I'm throwing this out there as a thought for you to consider if you live near ocean or lake swimming beaches (or even if you metal detect non-swimming areas).
OK, let's get back to selling your placer gold (or gold and silver junk jewelry):
1) Dry your placer gold out and weigh it on an accurate beam or digital scale. Make sure to subtract the tare weight of any container you're using to hold the gold from the final weight to get an accurate final weight. NOTE: DO NOT sell any nuggets unless they are very small ones. All other nuggets should be kept in your possession or sold individually despite any difficulties doing so. Nuggets always command a premium above their melt value.
2) You'll need a scratch or rubbing stone and a karat acid test kit. A scratch stone is simply a dark-colored rough surfaced stone that gold buyers (including pawn and coin shops, etc.) use to help determine the karat content of any placer gold brought to them (and karat-stamped jewelry). Acid kits in the United States usually contain small plastic bottles with a drip tip that are marked 10K, 14K, 18K, and 22K. They'll also contain (in most instances) acid to test platinum and silver. To get a good idea of the purity of your placer simply take a larger flake or piece of your placer gold and rub it a few times across the scratch stone. This is the age-old "streak test." Placer gold and real gold jewelry will "streak" gold...that is, leave a gold-colored streak or streaks.
3) Determining the approximate value of placer gold is a deductive process. After doing the streak test try squeezing a drop or two of 22K acid onto the streak(s). If the gold streaks remain on the scratch stone your placer is at least 22K or .917 fine purity value out of a total 24K purity (.999). No placer gold is much higher than 22K in my experience, although the possibility does exist because Ma Nature can be over generous with her wealth at times. If your streaks disappear after the 22K acid test the purity of your gold is less than 22K so you'll next back down and do an 18K acid test the same way. If the gold streaks remain on the scratch stone then your placer is at least 18K or .750 fine. More than likely it will be a bit higher than that (.800 fine or plus thereabouts) which is a good average purity for placer. If your streaks disappear under the 18K test then your gold's purity value needs to be tested at 14K and so on and so on. Junk or recovered gold jewelry is handled the same way. Jewelry stamped 14K should streak gold after 14K testing but the streaks will disappear when 18K acid solution is used. I think you get the idea here. (By the way, this is the same manner in which you can test all gold jewelry to determine if it is truly gold and what karat purity it really is.)
4) So let's say you've determined that the ounce of that placer gold you want to sell is .800 fine. Let's also use a current market "spot" value for gold of $1,000 (USD) per troy ounce for the sake of convenience. You can do this calculation in your head. Your placer gold is worth $800.00 at the current spot price. So now you know what your gold is worth and your job is to find a buyer that's gonna purchase your gold at an amount that's as close to $800 as possible. Note that I said as close to that amount as possible. There is NO WAY any buyer is going to purchase your ounce of .800 fine placer for $800 for the most obvious of reasons. The buyer needs to make some money on your transaction to stay in business! Call it the buyer's "nut" or "edge" or "profit margin" or whatever. Just so you know, small gold buyers (coin shops, etc.) also have to pay their own "nut" to a bigger gold buyer/refiner or supplier. In other words, everyone up the buyer food chain gets a piece of your gold pie. It's the way of the world folks, like it or not. By the way, I consider pawn shops one of the worst venues for getting a fair price for your gold. Why? They are used to dealing with desperate people for the most part and consistently "low ball" them.
5) Now the question arises as to what's the buyer's margin range. Ready for this? It can be as low as five percent or as high as 35% percent! Yep...you heard right. Thirty-five freaking percent. At that high-end buyer's edge, your $800 worth of placer gold just got slapped down to $520!! A complete and total rip off to be sure. Ditto if you're selling gold jewelry. On the other hand, finding a buyer for your gold who will only take a five percent margin is often problematic, if not impossible (but it can be done). As painful as it may sound, most small gold buyers will hit you with a profit margin of 10%-20% and if you're selling gold jewelry that can rise to 20%-30%! So what's a fair buying price for your $800 worth of placer? There is no single answer to that question, although I always opted for 15% as a high margin and under 10% as a low margin. In fact, any buyer who buys your gold using a margin less than 10% is...well...golden. But in the end it is you and you alone who has to determine what you consider a "fair" price for your gold. If you feel you're being ripped off you probably are being ripped off. If you feel that you can live with the profit margin or "nut" a buyer offers you, then go with it.
6) The upshot to selling your placer gold or junk or recovered gold jewelry at a fair price is to KNOW UPFRONT what the true value of your gold is. I'll say this again: know upfront what you are selling is worth. You wouldn't sell a car or a house without knowing the real value of those items would you? No. The same holds true for your gold. If you don't know what you have in your hand is worth, then a buyer can offer you anything for it. This is the mistake most people make out there when they sell a gold ring or other jewelry to a coin or pawn shop. They have NO IDEA what their gold is worth and because of that, they take whatever the shop owner or buyer offers them. Crazy is as crazy does in this regard. And "uneducated" folks like this get ripped off royally each and every time. There is absolutely no need to get fleeced with your gold since there are many good websites online that provide calculators for determining the value of your gold based on weight, purity, gold spot price, and desired buyer profit margin percentage. Here is one of those calculators.
7) There are a couple of ways to sell your gold at lower buyer profit margins. The first of these is based on the assumption you don't need cash for your gold. If you aren't desperate for cash, work out a "trade" deal for your gold with the buyer. Instead of taking cash for your gold (and getting less for it), trade the value of your gold for bullion or other "real value" items that the buyer sells in his or her shop or venue. By doing so, you can "negotiate" a better price for your gold and may be able to hit that low five percent profit margin, or buyer "nuts" that are under 10 percent. Alternately, you can trade half the value of your gold for bullion and take the other half in cash or any combination thereof. These are proven ways to lower the buyer's margin in your favor. Trading your gold straight across is a win-win for both parties. I know this because I have done it for more years than some of you out there have been out of diapers. The second way to lower the buyer's "nut" is to develop a long-term relationship with the buyer, especially if they are a coin shop owner and the like. I'm talking here about a buyer who gives you a fair shake to begin with, of course. Keep selling your gold over time to this buyer and be a stand-up dude or dudette who is always courteous, friendly, and honest. This takes time, of course, but once you're "in" with that gold buyer you'll find that they'll take less of a nut from your gold sales or you can negotiate a better percentage. This isn't guaranteed but it has worked well for me over the course of four decades.
(To get a better deal on your gold, try working a "trade" with the buyer.)
8) All your gold transactions should be done in person. Never put your placer gold or gold jewelry in one of those prepared mailers and send it off to a "buyer" or company you know absolutely nothing about. Although a few of these snail mail buyers (very few I suspect) could be on the up and up, this is the quickest path to perdition and having your gold "stolen" from you. By stolen I mean the buyer will take a "nut" as high as 91% or simply vanish and you'll be sitting at home waiting for the mailman to arrive with the check these thieves were supposed to send you three months ago. Think I'm joking about getting ripped off totally or that 91% buyer's "nut?" Well pard, it's no joke and I'm as serious as a SEAL sniper sighting in on a Taliban fighter. Yes, these things have happened to those unwary or just plain ignorant folks who sent their gold off in a mailer to some scammer, con man, or low-ball artist masquerading as a legit gold buyer. So be forewarned. DO ALL YOUR GOLD TRANSACTIONS IN PERSON. The risks are too high otherwise (and don't say I didn't warn you).
9) If you're planning on selling recovered or junk gold jewelry remove any and all semi-precious or precious stones from that jewelry first. Gold buyers could give a shit less about about the stones in common jewelry and are hoping you operate the same way too. That way they can sell those stones separately and just give you the melt value of the gold in that ring or necklace. In other words, you pay their "nut" for the gold sale and get taken again by letting them have any stones that were mounted in that gold. So, if you're bound and determined to sell the gold mountings (whatever they may be) remove the stones from those jewelry pieces first. If you can't do this without causing potential harm to the precious or semi-precious stones have someone with experience do it for you. That way you can either sell those stones (especially diamonds, emeralds, rubies, etc.) or save them to use in custom jewelry pieces made for loved ones. This is what I frequently did with semi-precious stones like tourmaline, citrine, amethyst, and so on. The biggest diamond I ever recovered beach hunting was a flawed 1.25 karat stone that I sold separately for $1,250.00 (its GIA certified value at the time) back in 1983. The ugly 18K man's ring it came from was "traded" for gold bullion. If you recover or have in your possession really fine gold or silver jewelry with or without stones, make sure to get those pieces appraised or look them up online to get an average value. Antique jewelry or pieces with designer hallmarks should never be sold for melt. And any of you who may think your gold jewelry is worth the retail price you payed for it are living in La-La Land. That nice diamond ring you bought your beau at Zale's for $2,000 last year will never command a price even close to that amount from any buyer, especially pawn shops. Retail markups in jewelry are some of the highest in the business and can be as low as 100% on up to 300, 400, or even 500%!
That's about it from my point of view. I hope this post opened a few eyes.
(c) Jim Rocha 2019
Questions? E-mail me at firstname.lastname@example.org