How to Sell Gold at a Pawn Shop – and Get the Most Money!
Every day, you hear news about different places that buy gold, silver, and jewelry. Many of these places say they offer you “top dollar” for your items. Sadly, this is not always the case, and you could easily find yourself getting ripped off if you are not careful. In order to protect yourself, you need to learn how and where to sell gold and jewelry.
History of Selling Gold
Long ago, gold was used as a form of everyday money to pay for goods and services. People would use gold like we use cash or our debit cards today. The main problem people had was being able to carry around all that gold whenever they wanted to make a purchase.
To help make buying goods and services easier, governments created their own paper money. To protect the value of gold, many governments backed their paper money using what was called “The Gold Standard.”1
This standard meant that all paper money could be exchanged for the same amount of gold. One could exchange gold for the same amount of paper money, too. For example, you could cash in $5 of paper money for $5 of pure gold.
Here in the United States, The Gold Standard was slowly phased out after the Great Depression that lasted from 1929 to 1939. During this time, people were converting their cash into gold faster than banks could handle it. People were scared and wanted to make sure their paper money did not become worthless.
Even after the U.S. government phased out The Gold Standard, gold did not lose its value. Instead, gold was viewed as a way for people to make an investment and have something of value should another major depression ever occur again.
More recently, the Great Recession of 2007-2009 lasted for several years and caused concern about the value of paper money. People that had gold knew they could sell it, as gold had retained its value, even though the economy had collapsed.
Why Is Selling Gold Still “Hot” Today?
Even though the U.S. economy recovered after the Great Recession, many people are still worried about current economic conditions. The prices of goods and services seem to continue to increase steadily, but wages and earnings have not increased to match them. This has placed a strain on many people, who are not being able to stretch their wages to cover all their living expenses.
Yet, if they have gold coins, jewelry, watches, or other such items lying around that they no longer want or need, they can sell their gold and turn it into much-needed cash. This is one reason selling gold is still “hot.”
Another reason has been the recent increase in the value of gold over the past thirty years. Back in 1988, gold’s average value was around $450 per ounce. Even in 2006, the price per ounce was still around $500.
Then the Great Recession hit, and the price of gold took off. By 2008, the price of gold jumped up to around $800 per ounce. Two years later, it was around $1,000 per ounce. In 2012, gold peaked at $1,864 per ounce.
While the economy recovered, the price of gold has continued to remain high. So far, this year, the value of gold has varied from around $1,250 to around $1,350. While it is not as high as it was in 2012, it is still much higher than it was 12 years ago.2
How Is Gold Valued?
The price per ounce of gold, like those above, or that you might see advertised by places where you can buy and sell gold, are normally for pure gold. Pure gold is the same as 24-karat (24K) gold. Gold that is not pure is rated based on the number of parts of pure gold it contains.
The easiest way to think about this is to look at 24K gold as a big pie that has been cut into 24 equal pieces. If you take two pieces away, you are left with 22K gold. If you take 6 pieces away, you are left with 18K gold.
Gold is valued based on its purity. So, if you have an 18K gold coin, it means there are only 18 pieces of pure gold, or it is 75 percent pure gold. If the current value of pure gold was $1,300 per ounce, then your 18K gold coin would only be worth 75 percent of $1,300 per ounce, which is $975 per ounce. If your gold coin contained two ounces of pure gold, then it would be valued at $1,950.
Basically, honest places that buy and sell gold will value your gold using a similar method. They will determine the amount of pure gold in the item. Then they will multiply the percentage of pure gold by the current daily rate of gold to determine its value and how much they will pay you for it.
- Please keep in mind, the dollar amounts used here are just to help give you an idea of how gold is valued and do not reflect the current daily rates or how much you could get for your gold items today.
Avoiding Gold Selling Scams
When you want to pawn gold and turn it into cash, you will want to be aware of different scams. In recent years, there are a number of “pop-up” places that buy and sell gold. However, these places are never what they seem. Some people have even lost their gold items and not gotten paid for them! Some of the more common scams they run include:
- Telling you they are a gold broker and cannot pay you until they sell your items. They ask you to give them your gold items and then, once they sell, they will send you a check in the mail. Quite often you will never see any money.
- Valuing all of your gold items based on the lowest karat, even if you have higher karat items. They will weigh all of your gold and then take the lowest karat to calculate the value. So, if you have 14K, 16K, and 18K items, they only use 14K to value everything.
- Secretly adjusting the scale to make it appear like your gold weighs less. The scales used by honest gold buyers are verified for accuracy by the state’s department of weights and measures on a regular basis. The same is not true with these “pop-up” shops. They could easily change the settings to make it look like your gold does not weigh as much as it really does.
- Saying your gold is only worth scrap value. The value of gold does not change whether it is used for scrap or kept in its current form. Some buyers will say they cannot give as much for it since it is scrap. The reason they do this is so they can earn a huge profit off of you.
- Using out-of-date gold rates. This is another tactic scammers use to make your gold seem less valuable. They will take the lowest rate they can find and say it has been adjusted for inflation or some other excuse. Their objective is to get you to sell your item for the least amount possible.
How to Get the Most from Selling Gold
To avoid scammers and get the most from selling your gold, remember to use these great tips:
- Sort your gold items by karat. If you get a magnifying glass and look at the item, you will find a stamp on it somewhere that tells you the gold karat. Use this to sort your items before getting them valued.
- Shop around and compare offers. Honest gold buyers are happy to give you a free quote for your items without any obligation. Just beware of online places where you have to ship them your gold since they normally charge a huge fee to return items if you don’t sell it to them.
- Check the daily rate of pure gold. Gold rates go up and down much like the stock market. If gold seems to be going through a period where it is going down, and you don’t need cash right away, it can be better to wait and sell your gold items once rates start going back up.
- Check the reputation of the gold buyer with the Better Business Bureau (BBB). The BBB will have listings for businesses that buy and sell gold. If the business is not listed, then it means it is probably a scammer. You can also find out if there have been any complaints about the business and how these were resolved.
- Look for businesses that have GIA (Gemological Institute of America) and JA (Jewelers of America) certified staff. These certifications mean the staff knows how to properly and accurately value gold, as well as other precious metals, jewelry, watches, and gemstones.
Does Older Gold Lose Value over Time?
Gold is gold, no matter when the item was made, and it retains its value based on the current daily rates for gold. This is why many people buy gold as an investment when prices are low and then sell it to a gold buyer when prices go up.
If you want to find out how much your gold items, jewelry, watches, or gemstones are worth, or you have further questions about how to buy and sell gold, please feel free to stop by one of GEM Pawnbrokers 26 convenient locations or contact us at 718-596-5626 today!
We monitor market prices daily and offer the highest prices paid to ensure you get the most cash for your gold items. We also offer instant cash loans, have a friendly expert, GIA- and JA-certified staff, and have been in business for over 70 years.
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