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2011 Gold Rush: Seller Beware!

6/1/2011


We have all been conned.  It happens when we least expect it, and consequently, we are left feeling violated, used, and less naïve about life.  We are surrounded by con artists who win us over with a smile, their abundant personality, and apparent sincerity as they ply their charms to entice us into emptying our pockets into theirs.  As the "gold rush of 2011" is raging throughout the world, so are the "confidence artists" who are out to mine everything possible from your willing hand: beware!


As appraisers, we have heard one tale after another of "I should not have sold it to that young man who seemed to be so nice." Or "I still have not heard back from the on-line service I used."  It is easy to point the finger of blame, but remember that three fingers are pointing back at you. A seller has to become educated and knowledgeable about what is to be sold and how to sell it.


 If you are well armed and aware then you will calculate what you want to sell on your own. It can become moderately difficult, but if you have the acuity and the tools to do it on your own, go for it!  Just to give you an idea about how to start the project, you will need to figure out the value of scrap gold using an online calculator or do the calculation manually. The tools needed are a magnifying glass, a scale that weighs in grams or ounces, and a calculator. Next, you will have to separate the scrap gold in to 10K, 14K, 18K or 24K. Gold is figured by gram based on the gold price being offered that day. Gold fluctuates daily and is measured in troy ounces, or about 31 grams. You get the picture ... if you have become overwhelmed with this short paragraph, then do what most sellers do, shop around, gather the information, and settle on the best offer.


Owners of scrap gold and second-hand jewelry must shop around for the best offers.  A savvy seller will take the gold to a reputable jeweler who does the figuring and then gives an offer.  That becomes your starting point.  Knowing the weight in grams of your cache of gold, the comparison begins.   Seemingly, the longer you wait the daily escalating price of gold is to your advantage. Pawn shops, dealers, on-line services, and even the barber shop owner are all searching for that buy.


Remember no one in their right mind is going to pay you the full intrinsic value of scrap gold because there are refining costs and other losses and expenses to be deducted.  U.S. manufacturers are legally allowed a half carat tolerance which means that a 10 karat gold ring is often only 9.5 carats meaning that the buyer might take a 5% deduction from the original offer.  The buyer expects to make a profit, so if you have a rather large volume of scrap gold to sell, you should hope to get about 90% of its intrinsic value.  For smaller amounts expect 80%.   


Don't let another con artist use you.  Most research shows that many jewelers and market traders are only paying between 15% and 60% of the true value.  Be diligent and politely close the door on the young man who captivates you with his charm, and search for the richest payoff during the 2011 gold rush.



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