Selling Gold Jewelry

The price of gold is near an all-time high, so it's tempting to want to start cleaning out your jewelry box and cash in on this latest gold rush.

But before you toss grandma's filigrees into the scrap heap, here are some things you need to know about selling gold jewelry.

Selling Gold Jewelry For Scrap

If you're like most people, you have new gold jewelry, old gold jewelry and, pardon the expression, crap gold jewelry. You know what I mean, that cheesy old school ring you're not sure why you bought in the first place, that ugly ring that appealed to your teenage sensibilities, that banged up bangle you haven't worn since catching it in a car door, a lonely earring that lost its mate a long time ago.

These are exactly the types of gold jewelry you can sell for scrap. Its condition or appearance doesn't matter - only the quantity and quality of the gold in the piece. When you sell for scrap, the gold buyer's intent is simply to melt it down to recover the gold. Neither craftsmanship nor sentimentality have any value.

Other good candidates you may not have thought of are gold dental crowns or bridges, broken gold watches, placer gold (nuggets that were panned for) and the run-of-the-mill variety wedding band that is all your ex-wife left you with.

How to Sell Gold Jewelry - By the Numbers

So with selling gold jewelry and other items for scrap, what determines your payout is:

karat
weight
price of gold that day
refining fee
profit

When you see the price of gold - a heady $1,150 an ounce today - that is based on 24k gold, which is pure gold. 22k is 91.7% gold, 18k is 75%, 14k is 58.3% and 10k is 41.7%. Your pieces will be discounted accordingly. (You can check gold prices at goldprice.org.)

There is a cost to extract melt down and extract the gold, and a small percentage of gold is actually lost in this process, so this will also be taken off the value.

And lastly, no one is in business for nothing, so the buyer will deduct another amount to cover the profit he's looking to make on the deal.

In the end, it may not add to very much. But if it's junk cluttering up your drawers, it's better than nothing.

Know What Your Gold Jewelry is Worth

So with all this in mind, the only way you're going to know if a gold buyer is giving you a fair price or ripping you off is to know the karat of piece and its weight. You can plug those two figures into this neat little calculator and it'll spit out the value based on the day's gold price.

When you start scoping out potential buyers, try to get 85% of that figure.

If you don't feel like legging it to a local jeweler, you might be considering those mail-in companies constantly beckoning on TV, online and print ads to send them your unwanted gold.

No matter what their glossy ads say, they probably won't offer the best price, some consumer watchdog agencies have found. Nevertheless, convenience is worth it for some people.

You Better Shop Around

But it's even more crucial that you do your homework when considering a mail in gold buying company (see the video below). Before you send your goods, take photographs and remove any gemstones. You want free, insured shipping and a way of tracking it online.

The other thing to find out with these companies is if they themselves do the refining of the scrap because if not then they are a middle man. And that means they have to pay you less to cover their costs of sending the gold to a refiner who melts down the items.

But Aunty's Ring is an Antique!

So far, we've been talking about junk gold jewelry really - ugly, damaged, broken, unmatched pieces that are only fit for the scrap heap.

But if the unwanted jewelry you want to unload is antique, well-crafted, bejeweled, then this is not the route to selling-gold riches. As stated above, none of these qualities matter when it's getting melted down. The value of fine jewelry is often far more than the sum of its parts - that is, the weight of the gold or other precious metal and the value of the gems. Artistry, rarity, antiquity can all plump up its price, often ridiculously. Gotta love that.

Here's where it's probably worth it to pay for an appraisal. Then, appraisal in hand, hit some jewelers who buy gold jewelry and have them make you an offer. Don't go with the first guy - you need to have other offers to compare it to. Stay away from pawn shops; in most every case, they will lowball you.

You can also sell your jewelry on auction sites like eBay. You have an appraisal so you know what it's worth. You can set it for a specific price, or sell it in an auction. To avoid giving your jewelry away if there are few bids, set a reserve price, the lowest price you are willing to accept for the item. Remember to take great pictures of various views and give detailed information. If you're willing to sell for less than the appraised value, you can upload an image of the appraisal effectively showing buyers what a deal they'd be getting buying this gem of a piece from you.