# selling gold jewelry



## Tostig (Nov 18, 2020)

Had some gold jewelry passed down to me from my late father.
Took a few to a jewelry buyer to learn how the process works.
On the wall, the spot price was posted for the day per 9am local time (Vancouver) at $2306.14 /oz

When I got home, I googled "gold spot price CAD" and got the Kitco website, gold minute by minute chart based on EST. So I looked up the 12pm EST spot price for gold on January 26, 2022 and got $2307.62 high, 2307.52 low & close (which happens to be the low price that hour). So it looks like the posted quote is just below the spot by $1.32 (0.06%) which I think is reasonable.

So here are my questions:
1) if their buy price is so close to the spot price, how do they make money? I'd expect a buy/sell spread just like foreign currency exchanges.

2) the place where we did the valuation looks reputable and has a website with the BBB accreditation and the process and payment seemingly transparent. What are the signs to look for to ensure they are reputable?

3) What precautions should one take to make sure you do get your worth?

Thanks


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## james4beach (Nov 15, 2012)

Tostig said:


> On the wall, the spot price was posted for the day per 9am local time (Vancouver) at $2306.14 /oz


I have never sold gold jewellery but I wanted to mention that the market spot price for gold refers to pure gold, 24 karats. What you're trying to sell has a lower karat so it's going to be worth less per oz. I think they are showing the pure gold market rate as a reference, which makes sense. They won't know the karats until they take a close look at the item.

Here's a Globe & Mail article about this process and a relevant excerpt

​Next, see whether you can find out how much gold is actually in your jewellery. Mr. Kacarevic said a stamp on your jewellery saying 24 karats means pure gold, while 12 karats would be a 50-50 mix of gold and the likes of silver and copper.​​*"If gold is $1,000 an ounce and you have a 24-karat piece of jewellery, you can generally price that around $1,000," Mr. Kacarevic said. "If it's 12 karat, then it's probably around $500."*​​Notice the use of the word "around." Gold prices are a lot like the Canadian dollar in that the prices and quotes you see published are wholesale rates for mega-size financial companies. Individuals pay more when they buy, and get less when they sell.​​The question is, how much less? Mr. Kacarevic said within 10 to 15 per cent of the spot price would be reasonable when selling. Can't get that much? Then check out a few different buyers and go with your best price. Ideally, you'd have someone qualified as a gemologist take a look at your jewellery.​​
Reading a couple sources, it sounds like the karat can be used like a ratio (divide by 24 karats). For example a 10 karat item is worth roughly 10/24 x spot price.

Then as per the G&M article, expect to get something within 15% of that.


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## OptsyEagle (Nov 29, 2009)

Until you get a quote on your own gold you don't know what price they are actually going to give you. Telling someone the spot price does not guarantee they will pay that, it just implies it. There is a big difference.

Over a decade ago when gold was shooting up and everyone including your neighbour was buying and selling used jewelry for their gold value, there was a public company that traded on NASDAQ that was in that business. They might still be, I can't remember their name. I looked at one of there quarterly reports, just out of curiosity, to find out what they were paying people for gold. Their "gross margin" was around 90%. That told me they were paying 10 cents on the dollar for gold. So in today's case about $230 per ounce.

None of that tells you what that company will pay you for your gold but I suspect they will be all smiles and polite right up until they start quoting their money for your gold. I am sure you have seen this before. 
Good luck.


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## jargey3000 (Jan 25, 2011)

(following this thead) with aunt minnie's jewellery in hand....


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## Beaver101 (Nov 14, 2011)

jargey3000 said:


> (following this thead) with aunt minnie's jewellery in hand....


 ... why are you getting "aunt minnie's jewellery"? Shouldn't those go to the niece(s) or at least as heirlooms?


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## ian (Jun 18, 2016)

We have taken gold to our small local jeweler twice. We trust him. He says he is giving us what he gets from the refiner less ten percent. No idea if it is so. He has treated us fairly for years so that is all we can depend on. Separates the 10, 14, 18carat from each other, weight them up etc. And discards the phony bits. We pick up a cheque a few days later. $1800 and $2400 respectively.

Better that dealing some mall store chain store that we have never dealt with or some out of town buyer who rents a room in a hotel and advertised that you can turn your life around with what they are paying for gold, watches, and fine jewelry. Not.


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## diharv (Apr 19, 2011)

Send it straight to the refiner yourself. I've got a container of dental metals that I haven't got around to sending off since I retired.


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## Tostig (Nov 18, 2020)

@james4beach
@OptsyEagle

That's exactly what the gold buyer did. First, she took out the magnifying glass to read the markings. Then rubbed it onto a stone and did the acid test to confirm. When it didn't match the marking, she did an x-ray.

The quote listed each item, the karat, the grams and the final quote. Seems transparent. Just don't know if there are any tricks the shady dealers would do like weigh it lighter than you had weighed them or tell you lower karats or something else. Or if the quotes for the lower karats are fair.

But it's obvious, I'm never going to throw them into the mail like what I used to see on TV commercials.


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## james4beach (Nov 15, 2012)

Tostig said:


> The quote listed each item, the karat, the grams and the final quote. Seems transparent. Just don't know if there are any tricks the shady dealers would do like weigh it lighter than you had weighed them or tell you lower karats or something else. Or if the quotes for the lower karats are fair.


That seems transparent. The tricks I can think of are under-stating the purity / karat to scale down what they are offering.

Here's an easy "spot check" that I can think of. Take one of the highest karat items to another dealer and inquire about how many karats this is. Just say you are curious about the purity of this item, wondering what its value might be, and how many karats.

If the second dealer confirms the karat rating, that would seem to confirm the first was giving an honest assessment.

I would also re-calculate the scaling based on the karats yourself. It's all based on the ratio, so just double check the calculation of karats/24 * spot market price.


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## Tostig (Nov 18, 2020)

james4beach said:


> ...
> 
> If the second dealer confirms the karat rating, that would seem to confirm the first was giving an honest assessment.
> 
> ...


And if the 2nd dealer disagrees with the first, I will have to decide who is telling the truth. Take it to a third, fourth, etc. and then decide who offered the best price.

This reminds me of watching stock analysis on tv. First someone gives his argument why ABC is a good buy. Then, of course, someone has to give an opposing point of view. In the end, the host tells to viewer, that it's up to the investor to make his own informed decision when now the informed investor is all confused.



james4beach said:


> karats/24 * spot market price.


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## jargey3000 (Jan 25, 2011)

Beaver101 said:


> ... why are you getting "aunt minnie's jewellery"? Shouldn't those go to the niece(s) or at least as heirlooms?


aunt minnie, god rest her soul, willed everything to her favorite nephew.🤓


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