Its relationship with humans is as old as human civilization itself. Its roots go as far back as Ancient Egypt, and it is still as highly prized now as it was then.
If you’re sitting on an inheritance of gold bullion, expensive jewelry, or have happened upon a treasure chest while excavating a sunken pirate ship, you may be sitting on a small fortune.
Pawning gold is a good way to make some quick cash, but you have to know what you’re doing. Read on to learn more.
The pawn world can be shark-infested waters, filled with crooks and ruthless swindlers. But if you know what you’re doing, you’ll be just fine.
Here are eight things you need to know about pawning gold.
Gold is an asset, like a stock, that is publicly traded and has a market value.
Like a stock, its value is always fluctuating as well. Luckily for you, this information is easily obtained and tracked. Currently, the price of gold is at $1,333 per ounce.
You can use this as a baseline to determine the price of your gold jewelry or bullion.
The karat of your gold is what measures the purity of it. Pure gold is 24 karats and is so soft that it can be bitten into.
If the gold in your possession is in jewelry form, then it will most likely be mixed with other metals. The question is just how much other metals are mixed in.
Most pieces of gold, whether it’s in the form of jewelry or bouillon have the karat marked on the gold. On rings, it is typically on the inside of the band. If you can’t find any karat markings anywhere, you can test the purity of your gold by buying a gold test kit.
This is what is known as the Touchstone Method. For the time’s sake, I’ll describe it briefly. What you do is you take the stone found in your test kit and rub your gold jewelry against. This will leave a bit of gold residue on the stone.
Then, you place a small amount of nitric acid onto the residue. Pure gold is extremely resistant to strong acids, so if the residue does not dissolve when exposed to the strongest nitric acid in your test kit, it is most likely pure gold.
Every test usually comes with different-strength acids for purer and impurer (24-karat, 22-karat, 18-karat, etc.) gold pieces. How pure the gold is will determine the value of your gold, so it’s important to know.
When pawning gold, it is important to keep all of your gold pieces separated by karat. Some gold buyers will weigh all of your gold together and give you an appraisal based on the value of your lowest karat.
Clearly, if you have a mix of 22-karat and 12-karat gold, this is a raw deal. So make sure you know much of each karat of gold you have in your stash.
Gold is commonly weighed in traditional grams or “pennyweights.”
A pennyweight comes out to about 1.555 grams. When it comes to ounces, gold isn’t weighed in normal ounces (28 grams). It’s measured in what is called Troy (31.1 grams).
This is important information to know because sometimes a gold buyer will try to get sneaky and weight your gold in pennyweights, but try to pass it off as grams and short the sale price. Since pennyweights are heavier than traditional grams, you’d be losing money.
The best safeguard against this is to weigh your gold at home on a high-quality scale and make the all the conversions to pennyweights and Troy required. And make sure the gold buyer’s scale is in full view when he appraises your gold.
If his weight doesn’t match yours, something is off.
Any legitimate buyer will be licensed by his home state to buy and sell gold and will readily show you his licensing.
A good buyer would also ask you to show a form of government I.D. to prevent the sale of stolen goods.
There are roving gold buyers that come into your state, advertising top-rate gold exchange prices, but don’t have a proper storefront or shop to work out of.
Instead, they’ll post up in a hotel room, ballroom, or a cheaply rented space and work out of there. They’re most likely always moving because they have a bad reputation for ripping everyone off. They aren’t there to give you or anyone else a good deal.
It’s best to avoid these situations entirely.
When pawning gold jewelry, it’s important to figure out if the piece you’re selling is worth more with all its gold parts scrapped and melted down or sold as a whole piece.
There are ways to estimate the scrap gold value of your piece with online calculators. Or you can get the piece appraised by a professional and decide upon its supposed value.
It’s important to acknowledge the fact that the scrap value of your gold will always be considerably less than the value of it when it’s melted down. If you can stomach that, then go ahead. Otherwise, it might be more beneficial to sell your jewelry as-is.
If you’re pawning gold, you’ve got something people want, so use that to your advantage. Shop around at different pawn shops or jewelers. Leverage their appraisals against each other to get the best deal.
Just remember to be patient. You’ll make more money this way.
Now you know all the tools of the trade, you’re ready to sell.
Since running around town to get different prices from all your local pawnbrokers is such a hassle, consider selling with us. We’re an online shop that gets cash offers from pawnbrokers in your area and puts them in one place.
This way, you can compare offers so you’ll make sure you always get the best price.
David Stiebel is one of the cofounders of PawnGuru. David was educated at MIT, where he studied Math. He subsequently worked at Bain as a data scientist before starting PawnGuru in 2015. He started PawnGuru to build a better tool for pawn shops and consumers to connect.More Articles