Turn Gold Into Green
Unwanted watches or broken jewelry can be worth their weight.
By Erin Burt, Contributing Editor
From Kiplinger's Personal Finance magazine, June 2008
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Many people are taking advantage of high gold prices to turn unwanted jewelry into cash, but others wonder whether cashing in their old gold is an idea whose time has not yet come. Couldn't gold prices go a lot higher? they are asking.
Gold hit a record high of $1,033 per ounce in March 2008 and was hovering just under $900 per ounce in April 2009. Some experts call the metal still relatively cheap. In inflation-adjusted terms, the previous high of $850 an ounce in 1980 translates to about $2,200 today. However, we anticipate no such price anytime soon (see What's Bubbling Over Now). Because gold has almost no industrial use, we expect it to trade in the $850-to-$1,000 range for the foreseeable future.
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Everything from your grandfather's watch to those broken chains and lone earrings in the bottom of your drawer are worth their weight. And because prices move opposite to the value of the dollar, gold is considered a good hedge against inflation.
Still, with the price of gold unlikely to continue spiking, this could indeed be the time to cash in your unwanted pieces. If you simply don't want the jewelry, you can sell it and use the proceeds to buy a gold exchange-traded fund, such as streetTracks Gold Shares (symbol GLD).
When cashing in unwanted jewelry, find out how much it's worth, then shop around for the best offer. (And gold is not the only metal that'll fetch a decent price. Silver and platinum have also gone up.)
Ka-ching! The price you see in the newspaper for gold is based on pure, 24-karat gold. But most gold jewelry in the U.S. is less pure, at 10 to 18 karats. That means if you sell an 18-karat-gold necklace, you'll get 75% of the pure-gold price per ounce. A 14-karat piece drops to 58%, and so on. Plus, a cut goes for the buyer's profit and refiner costs.
If you're selling heirloom pieces, check with an appraiser, advises Chris Del Gatto, CEO of Circa, a jewelry buyer in New York City. "That little pin of your grandmother's could be worth much more than the intrinsic value of the gold." An appraiser usually charges between $50 and $200 an hour.
When looking for a buyer, get a few quotes for your loot. You can visit a pawnshop or jewelry store, or try the crop of buyers online. Circajewels.com, for example, specializes in reselling jewelry, while USGoldbuyers.com, Goldkit.com and Cash4Gold.com focus on scrap. You mail the buyer your jewelry for an estimate; it mails you a check if you accept the offer or sends your items back if you decline.
Whether you go local or online, check with the Better Business Bureau and your area's department of consumer affairs. Stick with a gold buyer that's been in business for a while and has few, if any, unresolved complaints with the BBB. If you go the Web route, make sure the buyer offers free insured shipping and that you keep a detailed record of the box's contents.
Find More Advice at Spending Wisely
Reader Comments (6)
Posted by: Justin Case at 05/27/2008 08:44:53 PM
Let me get this straight. You think we should sell our gold, which has been increasing in value for the last 6 years, and take in exchange, pieces of paper with numbers and pretty pictures on them which have been falling in value for the last 7 years?..A better strategy would be to take any dollars you have and buy some gold or silver with them. Not only would that help our national economy, but it would provide some personal growing wealth for yourself. Gold and silver will probably go down when the value of the dollar goes up, but that won't happen in any long term way until the governments and bankers of the world quit printing up paper money out of thin air... Gold and silver have been wealth for thousands of years before the Federal IOU even got it socks on in the morning.
Posted by: Robert sachs at 05/29/2008 10:40:18 AM
I agree with comments from Justin. Buying gold or silver bullion would be a better idea. I can see gold and silver increasing in value even if the dollar regains value. If everything collapsed you still have buying power.
Posted by: David at 05/31/2008 11:01:20 AM
What if I sell my gold and buy a great under-priced home with it? Or undevalued stock...? Gold has traditionally not been a great investment however with oil looking at $200/barrel on the horizon, maybe gold will go to $1,500... whacha think...?
Posted by: Robert Alejandre at 06/01/2008 11:43:22 PM
I'm a gold bull and have been since early in 2005 and believe the big picture remains bullish for gold. That said I agree with your article we need to be careful about when and where we enter the market. Just make sure your buying and selling it to the speculators and not the pro's or you will end up with neither gold or green.
Posted by: Erik P. at 10/08/2009 06:19:03 AM
Great article! I hear good and bad things about some of the gold buyers. However, everyone should first research and THEN sell. If you sell based on impulse you could end up selling it for far less than it's worth. See goldvox.com and checking out what other people have to say about the service first. Also, if you have used them before let other people know if you had a good experience!...Good luck!
Posted by: Ryan at 11/11/2009 11:53:06 AM
I enjoy reading the information on your site and especially like how the most affluent businesses are pointed out. When looking to sell my diamond I chose winston-stettner of new york city. I thought it would be nice for others to know the same...Thanks so much