NEW YORK (MainStreet) — It’s a bull market for gold out there, with gold selling for $1,877 an ounce after broaching $1,900 the day before, and while you may not own any gold bars or shares of a big South African gold mine, you may be able to take advantage of the times.
That tennis bracelet or gold coins you got for graduating from high school can be sold – and at a big profit.
The key is to know what you have (and its presumed value), know your buyer, and be realistic. Chances are good that you can cut a good deal on your own gold sale. Let’s look at what you need to know to sell your little piece of the gold market.
Get the right weight. The Better Business Bureau notes that certified gold dealers may be a good place to sell your gold, but they’ll try to get all the leverage they can. For example, a crafty gold dealer will weigh your gold using a standard measurement called a Troy ounce, but as the BBB warns, “Some dealers may also use a system of weights called pennyweight (dwt) to measure a Troy ounce, while others will use grams. A pennyweight is the equivalent of 1.555 grams. Be alert that a dealer does not weigh your gold by pennyweight but pay you by the gram, a sneaky way for the dealer to pay you less for more weight of gold.”
Know the market price. Gold sales are a lot like used car negotiations – they go by faster than you think and the party who isn’t prepared is the one who walks out with the worse end of the deal. Job one is to always know the price of gold that you’re about to sell. Before you strike a deal, or even talk about striking a deal, check out TheStreet’s gold page with daily updates on the price of gold.
Be realistic. You probably won’t get the full value of your gold. Just like the guys on “American Pickers” or “Pawn Stars”, a professional buyer will want some “meat on the bone”, because he or she is likely reselling your gold for a profit. 70% of your gold’s value is actually a good deal, and expect a professional dealer to offer 50% of its value.
Deal face to face. There are plenty of options to sell but watch out for the online gold hucksters who promise “cash for gold” if you send in your old jewellry. They tend to offer pennies on the dollar. You’re better off with a jeweler or a certified, licensed gold dealer in your area, where you can negotiate face to face. If you have any doubts on the veracity of a gold dealer, check the Better Business Bureau for any complaints.
Bring I.D. No matter who you are selling to, bring your photo I.D. to any gold sale. Federal law requires it (to protect against money laundering and fraud), and any buyer who doesn’t require an I.D. may not be reputable.
Host a gold party. Amateur gold sellers are understandably anxious about selling gold to a stranger in a pawnshop or to someone online, and there are alternatives. “Gold parties” are popping up in communities all over America, where friends and neighbors (or even you) host a party, bring in an official appraiser who’ll tell you the value of your gold. Websites like MyGoldparty.com can help you find one in your area. Just think of it as a Tupperware party for the 21st century.
Selling gold, especially in the form of jewelry or coins, doesn’t need to be intimidating. As long as you’re informed and have your head up the whole time, you can strike a good deal – and put some extra cash into your pocket at a time when gold is at historic highs.
If you're looking to buy rather than sell, check out MainStreet's look at how to get in on the gold rush!