Understanding Gold Prices: Getting the Best Value When Selling

Question
The price of gold fluctuates but shouldn't you be able to get the going rate for it somewhere instead of half of it as is the case with all the advertised gold buyers I have checked with online and the bricks and mortar places around town? What does the daily price mean if you can't get it?

Answer
That's a great question Marlene!  Thank you for asking.  It might help if you compare gold to a cousin- money.  Banks buy and sell money all of the time, just like dealers buy and sell gold.  You might see in the news that the prime rate is 3%.  But if you go into the bank and tell them you want to buy a car, and want to finance it for 3% they will laugh at you.  That rate is not for you; that is the rate for the customer with the lowest risk factors.  It is their best corporate customers that can borrow the money at that rate- partly because they borrow a lot!

Gold is similar.  If you have a very large quantity you can sell to the refiners.  They will pay a price extremely close to spot.  But if you go in with your gold chain they will not bother with you.  The customers that interest them are dealers who can sell thousands of dollars per week of scrap gold.  They can make a profit that is substantial on this even if they have a small margin.  The small margin means that they might make a dollar or less on your gold chain- and that does not interest them.

That does not mean that you will not profit when gold goes up if you have jewelry to sell.  Quite the opposite.  Advertise your jewelry in the newspaper, but when a potential customer comes to look at it you can use the formula on my website to tell people exactly how much the piece is worth at melt value.  All you need to know is the weight in grams.  You are in essence competing with jewelry stores- and you will win.  You can offer your jewelry at a price that is 10% over scrap and you will look like a hero to the person who has shopped the stores for gold.  

Best of luck to you!

David Fortier, GG
Staff Gemologist
Tiptopgem.com