Scrap Gold

Buying or Selling scrap goldMost people who have gold that they want to sell, whether it’s gold coins or old or unwanted jewellery tend to think of it as “scrap gold” and look for a scrap gold dealer to sell it to.

In most cases, particularly for modern items of gold jewellery this will get you the maximum amount of money possible, since gold has a fixed value.

However there are some things that you need to think about where your item may be worth more than the scrap gold value, these being where you have an antique item, or where your item is made by a well known, top class maker.

In these cases your item could be worth many times more than the gold content alone, and so you need to get some specialist advice in these cases, this is covered in more detail on our gold basics page.

You also need to make sure that you use a reputable scrap gold dealer, as outlined on the home page. You can see a list of scrap gold dealers and companies here.

Working Out How Much Your Gold is Worth

If you’ve decided that your gold does not have additional value and you want to sell it, then you need to work out the purity of each of the items you have.

This is covered on our “about gold” page, and as you’ll see from that, different ratings of gold have different values, and so the first thing you need to do is to separate your gold into the different carat ratings.

Once you’ve done this you need to accurately weight your different groups of gold to see how much gold you have of each type.

It’s important to note 2 things:

  1. You need to remove any stones or non gold items from jewellery since we are only interested in the weight of the gold and nothing else;
  2. You need to get an accurate weight, so you’ll need to get a digital jewellery scale;

Digital scales are actually very cheap, you can get them from Amazon, eBay, etc for under £10 and they will give you an accurate weight.

Simply then weigh your gold and note how many grams (or if you’re lucky how many ounces) of each you have.

Calculating the Value of Your Gold

Once you have the weights you can then simply use the gold calculator at the websites of different scrap gold dealers to see how much each will offer you.

This is far easier than trying to work it out manually, and it’s important that you get an up to date value based on the price of gold today, since it is continuously changing, and can be dramatically different in price from one day to the next.

If you do decide to work out the value of your gold manually then you simply multiply the purity (.375, etc) by the weight of your gold, and the current price per gram or price per ounce of pure gold, and this will tell you how much it is worth.

It is perhaps worth doing this so that you know that the prices being quoted are in the right ball park, and you’re not being ripped off.

Overall though if you use the calculators on the main dealers websites you should get a true valuation that you can trust.

Of course make sure that you read the small print of any scrap gold dealer before you decide to use them!

Selling Scrap Gold

When you come to sell your scrap gold you have a number of options:

  1. Use one of the postal gold services from the main scrap gold dealers;
  2. Use a local pawn broker, jeweller, or other gold dealer;
  3. Sell it yourself on eBay or other online marketplace;

Each of these has its own benefits and drawbacks, which we’ll go through below:

  1. If you sell to a postal gold company you need to make sure you use a reputable company that will give you a fair price. All of the scam artists that we talked about on our home page use this method of dealing, so be careful who you choose to deal with, the dealers on our scrap gold dealers page are worth considering;
  2. Local pawn brokers, jewellers, etc are often one of the worst places to sell to, they offer much lower prices than your gold is worth, sometimes as bad or worse than the bad postal gold companies, so this is something you need to be very careful with;
  3. eBay will ensure that you get the market price for your gold, however you need to take into account the cost of the listing, the final value fee, AND the Paypal fee as well. Selling gold on eBay can, after costs, leave you with 20 – 25% less than selling to a reputable dealer, plus it can take days for the buyer to pay, ;

Overall then the best place to sell gold to is one of the reputable scrap gold postal services, you get the best price, and money in your bank the next day.

Buying Scrap Gold

One of the preferred ways for people to invest physically in gold is to buy scrap gold themselves either directly from people, or via sites like eBay.

Scrap gold offers an attractive way to buy gold to investors since coins and bullion bars carry a premium over the spot price of gold, whereas scrap gold jewellery is priced at the spot price, meaning that investors get more for their money, while owning an asset that is easy to convert into cash very quickly.

If you do intend to buy scrap gold as an investment then you need to think of a few things.

First of all you don’t want to broadcast the fact that you are buying gold to all and sundry, especially if you keep it at home, it’s just asking to be burgled, especially since the gold is easy to turn into cash and is untraceable (that is to say impossible to identify piece by piece).

If you’re planning on buying gold then advertise using a free email address and a pay as you go mobile phone number as your point of contact, and always meet people somewhere public, not in their home.

As an example of why this is important consider an antiques dealer we know who was asked to go to a farm to buy some expensive furniture, and was given directions by the caller.

He got a bad feeling and didn’t go in the end, but went there a few days later to find nothing but the old ruins of a farm up a long and isolated dirt track – if he’d have turned up with pockets full of cash he would have been robbed and maybe worse.

Similarly it’s easy to find the name and address of someone via their main phone number, or via a website that they own, so make sure that you are as hard to trace, or rather your address is as hard to trace as possible.

Because of the high price of gold there are also lots of fakes out there, even though they are hallmarked you may be buying a “gold bracelet” that is a copper tube filled with lead that has a gold coating, or brass rings that have fake hallmarks!

If you plan to buy off eBay then you are open to fraud, where you either get nothing for your money, or where they send you a load of junk like the items above that is worthless.

Of course there are many genuine sellers on eBay, but there are always those who are happy to try and rip you off, so be careful.

In some respects you may be better off paying that extra few percent premium to buy from a reputable dealer, although even then it is possible to lose out, we know someone who bought £thousands of pounds worth of gold coins and received a load of fake coins in among them.

If you’re looking to buy gold then you need to be careful!