We Buy Gold, the commercials say. You've probably seen the ads on TV and in newspapers.
With gold prices at or near record highs lately, more and more people are taking a second look at the precious metals sitting in their jewelry boxes and drawers, wondering if they should sell, sell, sell.
Harvey Galinn, a 70-year-old Towson resident, has been thinking about selling American Eagle gold coins dating from 1993 to 1997.
"I was just wondering what the process is?" Galinn said. "I sell it to somebody and then they resell it or do they melt it down? Where does that gold ultimately wind up after it leaves the consumer?"
Even though you may want to jump fast into that hot gold-selling action, now is a time to be extra cautious, informed and patient.
The best course of action would be to find an appraiser or dealer who advertises that it buys gold. In Maryland, Thomas Terpilak says that the Department of Labor, Licensing and Regulation issues licenses to secondhand precious metal object dealers.
"Dealers can't buy your gold without a license," said Terpilak, an accredited senior appraiser with the American Society of Appraisers. "You can find dealers and appraisers in the newspaper, but if you want to double check, you should make sure they have a license."
Once you've pinpointed a few dealers, Terpilak advises shopping around. Go from dealer to dealer to let them assess your gold and ask them how much they'll pay you per gram.
"If you're selling jewelry, certain gold will go for more money if it's from a known company like Tiffany or Cartier," Terpilak said. "Those names will trade for more money than generic pieces. If you've got a signature piece like that, you might want to consider going to an estate buyer. You shouldn't sell a fine piece for just the gold value."
If you're selling gold coins, you may want to go to a coin show to see if your coins are collectible. Coins like South African Krugerrands and Australian nuggets are bullion coins that are valued by their weight in a specific precious metal. People who purchase bullion coins usually just want to invest in metals.
But coins that have numismatic value may be worth more.
According to the American Numismatic Association, American Eagle and Canadian Maple Leaf bullion coins typically have a higher price than Krugerrands. And, according to the Professional Numismatics Guild, the average retail commission for one-ounce American Eagle or Maple Leaf coins is about five or six percent.
In getting the best price for jewelry, you should realize that most of your gold jewelry is not pure gold. For instance, 10 karat is 41.6 percent pure, 14 karat is 58.5 percent, 18 karat is 75 percent and 24 karat is, of course, pure, Terpilak said.
"What that means is that if you sell a 14 karat gold chain that weighs one ounce, you will not make $900 on it," Terpilak said. "As of Thursday, the price of gold was $945.10. Most people think you bring in an ounce and you'll get that much. You won't. The dealer would give you 58.5 percent of that $945, minus what the dealer would deduct from the price to make a slight profit."
Once the sale is made, the dealer could buff up your old jewelry and try to resell it in the store. Or, if it's in bad shape or damaged, the dealer could accumulate pieces to send to a refiner, which would melt it and then send the dealer a check.
Both Terpilak and the ANA warned against cold-call solicitations or mobile offices, set up in temporary locations such as motels, that offer instant cash for gold and silver coins.
"Reputable dealers will take a police report when you sell your gold," Terpilak said. "They'll hold on to the piece for 15 days or two weeks, depending on the jurisdiction, in case it's stolen. Oftentimes, the people who set up temporary shop don't take police reports and they don't have licenses to buy."