How to Make Money from Gold
What do you do if you want to make a few extra pounds and have the odd bit of bullion to spare? If you type into Google “How to make money from gold” you get over twenty-three million results. So it’s no surprise if you want to make some money from your unwanted jewellery, you could easily get confused and don’t know where to start.
Well the first thing to do as always is shop around. I took the same pieces of gold to outlets from Dorset through to London and asked the people over the counter to give me a price as if I was going to sell them.
Now we all know that if you go to a Jewellers or Cash for Gold shops then you are not going to get great value for your unwanted items. But how much of a difference was there? Each establishment was presented with three rings, a pair of ear rings and a 19th Century pocket watch with chain and sovereign.
The first Jewellers, a long-established family run business, looked at what I had and gave me a figure but were unable to confirm if the sovereign was a full size or half. So, they couldn’t be sure if what they were giving me was the right price. The second jeweller looked at each item and stated straight away that one ring and the ear rings were in fact silver, as per the hallmarks. However, despite this, Jeweller number two still offered me £27 for the two rings, as opposed to just £1.60 from Jeweller number one for all four items.
The third outlet also identified that two items were made of silver yet gave the best price at a staggering £95 for the two gold rings. Now at this stage you would think that the “experts” who deal with this kind of thing would know what they were doing. But as the research continued it seemed in some cases they knew even less than I did.
I discovered that one of the rings in my collection was not pure 9 Carat gold as it had a hallmark number of 335, instead of the usual 375 they expected to see. This caused a great deal of confusion leading to one establishment believing it to be German gold, whereas others thought it was just less pure. A hallmark shows the purity of the alloy in parts per 1000. For example, 750 parts per 1000 is the equivalent to the old 18 Carat gold standard and will be marked as such.
In a pawn brokers the staff seemed to be more knowledgeable in what they were handling but only offered me £27.84 for the two rings and tried to tell me it was a good price. However, in Covent Garden where you would expect the prices to be somewhat more, they were in fact somewhat less at just the measly cost of a double cheeseburger in your average pub.
So how can you try and make a better return on your unwanted gold? Well the first thing is to watch the news. It’s sad to say but when there is imminent talk of war in certain parts of the world then the level of gold rises. Auctioneer Richard Petty has been trading since 1979. He saw a spike in the sale of gold at the start of each Gulf war. When President Donald Trump made his recent comments on border closure, the price rose slightly again.
Sometimes a Jeweller may bring to an auction room a very specific piece to sell but often it will be a job lot quantity in a box. The Jeweller will know what they paid for the gold from a customer as well as know what it should fetch at auction, so take this into account. They add on the auctioneer’s fees and put on a minimum reserve. So before going straight to the High Street, it may be worth checking out your local auction house first.
But if you do decide to use the High Street or an online retailer then never take the first offer and always ask for more. There are many establishments who are willing to buy your gold from you but nearly always you should be able to increase your pocket wealth by refusing the first offer and asking if they can improve on it. This is because an establishment will offer you the price in ounces but they will trade with other dealers in a measurement called Troy ounces.
A Troy ounce is a unit of imperial measurement which is more commonly used to measure the mass of precious metals. A single Troy ounce is exactly 31.1034768 grams or in other words, approximately 1.0971 ounces. Because one regular ounce is 28.35 grams and a Troy ounce is 31.1 grams, the difference in weight is small but the comparison in cost is huge.
To give an example, my 0.2oz 22 Carat sovereign equates to 5.669 grams. If I enter this weight into a price comparison calculator for 22 Carat gold at the metric price I am given a value of £162.47 But if I then do the same calculation for Troy ounces, the figure jumps up to **an incredible £5053.49 Now I’m not saying you should all go and rush out to your nearest jewellers demanding top dollar, as the chances are you are not going to get it. But you can however, ask for more than the first offer when you use a reputable dealer.
Laura O’Meara from Dorset did just that. When she was getting married she pawned some old jewellery to help pay towards her wedding ring and went to a jeweller located in a shopping centre. It wasn’t much she had so was only offered £40 but when asked if they could give her any more, they did. An extra fiver.
However, sometimes when trying to ask for a little extra can go against you as was found out by Matthew Moore from Slough a few years ago. Mr Moore had a large 9 Carat bracelet so he took it to a Cash for Gold outlet in West London. It was whilst waiting for the owner to verify the item and make him an offer he noticed the exact same piece in the shop window. At first, he thought the owner made a mistake when he gave Mr Moore his offer, so asked for an improvement. But was immediately put in his place by the shopkeeper stating “take it or leave it”. The offer given was £600 but the price in the window was £1200.
The gold capital of the UK is Birmingham and that’s where all your items are sent to by the high-street chain store jewellers if you want to have a valuation. Unlike using an independent outlet who will give you a price straight away, it can usually take a few days before you receive a valuation or offer on your precious metals. If you don’t want to go with the offer, then they will return everything back to you. The same can be said for online companies also. They will return your items if you refuse any offers made but in some cases getting your items back can result in chasing the website company multiple times before your belongings are returned.
Now, technically anyone can sell this precious metal by turning jewellery into bullion and as such you can get miniature smelting pots online for just over £100. However, the UK is one of only a handful of countries in the world that require you to have compulsory hallmarking as a legal requirement. In addition, you also need to display the Assay office standard dealers notice. This means that every item which is sold as a precious metal must be tested and hallmarked by an independent third party Assay office, who guarantee that the metal is exactly what it is stated to be.
Minted coins can still be one of the better forms of gold trading today. Going back to my pocket watch, all the dealers I spoke to, offered between £151 and £260 just for the sovereign. However, if you are lucky enough to have a 2015 Britannia 1oz coin then you could be looking between £850 and £920 depending on where you go.
All prices quoted March 2017.
All that glitters may not be gold, so have the hallmarks checked to validate you are selling a true gold item.
Research the price beforehand in Troy Ounces, rather than just Ounces.
Never take the first offer, always ask for more.
The value of gold can go down as well as up.
Double check that your items and not part gold mixed with another alloy.
Go with a reputable seller and be careful of inferior establishments or some online companies.
**(Source http://www.mastermeltgroup.com/presman/ correct as of Tuesday 7th March 2017).
Assay Office Dealers Notice – PDF from their download site (download tab located near the bottom of the page). https://theassayoffice.co.uk/legislation/dealers-notices
1492 words – not including the title or above two sources.