A few weeks ago I went over some of the issues to consider when purchasing physical gold. This week I’d like to look at the other end of the transaction: What to do when it’s time to turn your gold into cash.
This is also where I need to remind my readers that I write for a company in the business of precious metals and while I hope you consider them when you’re shopping for a precious metals partner and to consult them for advice, I also encourage you shop around and compare.
In a strange quirk of how the precious metal trade works, it’s going to take a little more effort to sell gold than buy it. Even though you’ll have for more options on where to sell gold, having more choices isn’t necessarily a good thing if more of those choices are bad.
Like when buying gold, when you sell you’re going to be paying a margin off the spot price. In case you don’t know what the spot price is, it’s basically the cash price physical gold is trading for on a particular day. You can find the spot price on almost any precious metals site on the internet including National Gold Group, 24hgold.com, or kitco.com. The spot price as of this writing is $1,740.70 an ounce.
You won’t get the spot price when selling gold and silver. Your friendly gold and silver dealer has to make a living, and the way they do that is buying at a discount on the spot price and selling on a premium. Your goal is to minimize the difference between the cash price you get for your gold and the spot price.
This is right about the place someone asks me about all those sign spinners they see out on the street saying they buy gold. I’d really like to find some creative places to put those signs as many of those places are giving the precious metals trade a bad name. Many of them are trading on a 30 or 40 percent discount on the spot price, counting on selling to people who don’t understand the business.
What you’re selling will make a huge difference on what price you get for your gold, but the process will be very similar.
This will likely be widest discount on the spot price for gold. Jewelry is frequently lower purity gold that’s been mixed with other metals for durability and color. You’ll have to take it somewhere or mail it in to an online store to get an appraisal. No one is going to be able to give you a jewelry quote over the phone.
Collectible Gold Coins
Like jewelry, coins with numismatic value to collectors will have to be appraised individually. Rare and collectible gold coins are evaluated for factors other than the cost of the gold in them.
There are several price guides available, like The Official Redbook for coin collectors.
Mint-Issued Gold Coins
Coins such as the gold Canadian Maple Leaf, Krugerrands, and the Chinese Panda. These will usually be priced for their value in gold, which will vary with the purity, though some will also have a small mint premium.
Not all mint coins are created equal in gold content or weight. Krugerrands, for instance, are 22 carat gold, or .917 purity, but weigh 1.0909 troy ounces so you’re still getting 1 troy ounce of gold. Compare that to the American Buffalo and Canadian Maple Leaf are 24 carat, or .999 purity, and weigh 1.0000 troy ounces.
You should be able to get a fairly close estimate on the phone for mint-issued coins, though they’ll first need to be inspected for damage. Every ding, dent, scratch and fingerprint effects the price. Don’t clean gold coins, even if they’re dirty, and avoid handling them.
Gold bars are usually just a gold round or small bar with a mint stamp and purity. Some come with a control number and certificate of authenticity.
With gold bars you should be able to get a fairly accurate quote over the phone, which will save you a lot of driving.
Where To Sell
There are going to be many options for selling your gold, so shop competitively. Local dealers will likely be your fastest cash, but their discount from the spot price is usually steeper. Make sure they weigh the gold in your presence and, if you want to check their scale, a nickel always weighs 5 grams.
Online dealers will get you closer to the spot price, but with them you’ll be paying to ship your gold to them for appraisal and paying to ship it back if you don’t like the quote.
Chris Poindexter, Senior Writer, National Gold Group, Inc\
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