8 Things You Need to Know About Pawning Gold

February 18, 2020 - Jewelry & Luxury Items

Ah, gold. The trusty naturally-occurring metal we all know and love.

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.

Pawning Gold: A Pro’s Guide

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.

1. Know the Current Value of 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.

2. Know the Karat of Your Gold

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.

3. Don’t Mix Karats

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.

4. Check the Scale

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.

5. Check the Buyer’s Credentials

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.

6. Be Wary of Shady Buying Situations

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.

7. Scrapping vs. Selling Whole

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.

8. Use Your Leverage

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.

Ready to Part with Your Gold?

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
David Stiebel

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.

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Comments

Avatar for Deb Pearl

Deb Pearl

April 25, 2018, 5:04 PM

I’m glad you mentioned that when you are pawning gold it is important to keep all of your gold pieces separated by karat. I think it would be really good to know how many karats each piece is so you can get the most money out of it. Thank you for the great tips when selling gold. I will have to keep all these in mind.

Avatar for Sarah Smith

Sarah Smith

August 30, 2018, 11:21 PM

My sister just went through a divorce and wasn’t sure what to do with the jewelry her ex-husband had gifted her with. After talking it through with her, we decided that it might be a good idea to pawn her gold. I appreciate the information you’ve provided about using online calculators to determine if it would be better to pawn her gold jewelry whole or melted down.

Avatar for Tiffany Locke

Tiffany Locke

September 6, 2018, 4:15 AM

Your advice to know the current value of gold so that you have a baseline to determine what the amount you have is worth would be important. This could ensure you find a pawn shop or other buyer who will give you a good amount. When choosing who to sell it from, you’d probably want to go online to research places that buy gold and to read reviews so you can find one that is reliable so you can be comfortable and confident working with them.

Avatar for Joy Butler

Joy Butler

October 4, 2018, 9:50 PM

I liked your tip on shopping around pawn shops to find the best offer. It’s easy to settle. But next time I sell gold, I’ll remember what a little more effort can do.

Avatar for Amy Winters

Amy Winters

January 29, 2019, 3:44 PM

I like your suggestion to check the buyers credentials. I was thinking about pawning some of my gold jewelry soon. I ‘ll keep your advice in mind as I try to find a buyer.

Avatar for Hazel Owens

Hazel Owens

February 20, 2019, 9:36 PM

Thanks for the tip to keep the karats of gold separated so you can make sure you get the appropriate appraisal for your largest karat of gold. MY great grandma passed away a few years ago and I have a lot of her old gold jewelry, so I’m looking to sell it so I can get some money for my son before he goes to college. I’ll have to weight them myself to figure out the karats before I go into a store so I can make sure I get what each piece is worth.

Avatar for Sell My Gold

Sell My Gold

April 3, 2019, 11:33 AM

The most important things which you should keep in mind during selling the gold is actual price of your item.

Avatar for Millie Hue

Millie Hue

May 17, 2019, 12:45 AM

Thanks for helping me understand that we must check if they have a government ID to ensure that the transaction is legitimate. I will follow your advice to get the right amount of money when I sell the gold collection of my mom. We just need the money to pay for her medical bills since she will undergo surgery.

Avatar for Larry Weaver

Larry Weaver

July 30, 2019, 5:48 PM

Thanks for the advice on pawning gold. I have some gold that I would like to make money off of. I’ll be on the lookout for a pawnshop in my area that I can go to.

Avatar for Sarah Smith

Sarah Smith

September 6, 2019, 3:08 PM

Thanks for explaining that when selling gold jewelry, I want to make sure it is separated by karat so it isn’t all weighed together and priced at the lowest karat. My grandma gifted me with her collection of broaches, and I really don’t see myself wearing any of them. I’ll start looking for a shop I can sell the gold broaches at.

Avatar for Wade Joel

Wade Joel

October 9, 2019, 4:26 PM

I appreciate these great tips for selling gold and getting the most of it. The one that caught my attention the most was using your leverage and visiting different shops in order to get the best deal; I definitely wasn’t considering this. My grandfather passed away recently and I inherited some gold jewelry from him, but I wanted to get well informed about the whole pawning process before doing so. Now I’ll make sure to check the buyer’s credentials beforehand! Thanks you.

Avatar for Oscar Morrison

Oscar Morrison

November 8, 2019, 2:52 PM

It’s good to know that I should weigh it myself before I bring it in to sell it so that I can know that the buyer is being honest with me. We’ve been thinking about selling some old jewelry my wife doesn’t really care about to help boost our funds this holiday season, but we’ve wanted to make sure we get what it’s worth for it. We’ll probably look around and see who will give us the best deal for our old gold!

Avatar for Eileen Benson

Eileen Benson

December 11, 2019, 7:27 PM

I like your suggestion to weigh our gold beforehand and convert the measurements to all common units so we’re prepared for whatever terminology the buyer uses. I’m thinking about selling some of my gold necklaces over the weekend so I can get money for concert tickets. Reading your article helped me feel prepared to get a good deal from the pawn shop I end up selling to!

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