Selling Your Gold For Cash

We've all seen the commercials. The man on the TV wants to buy your gold. Prices have never been so high! They'll even send you a pre-paid envelope so you can mail your gold for free. A few days later you receive a check. Couldn't be simpler. And who couldn't use some extra cash in these times? Everybody has some old jewelry laying around and with gold prices rocketing ever higher the man on the TV  makes a good point. It does seem like the perfect time to sell. But you may first want to find out what your gold is really worth before you stuff those awesome gold grillz into a pre-paid envelope and rush out to the mailbox.

Why Is Gold So Expensive?

Like any commodity, the price of gold fluctuates. Speculators can push the price higher. Or lower. But, speculation aside, the inherent value of gold or any other commodity is based upon the principle of supply and demand. Simply put, there is a finite amount of gold on the planet. We can't make any more than is already in existence. And this amount is considerably small relative to other commodities like soybeans or cotton. Gold's rarity puts pressure on the supply side of the equation, squeezing the price upward.

Easy, right? The less of something there is, the more it is worth.

Think of it this way. I happen to know a lot of douchebags. Chances are, you happen to know a lot of douchebags, too. The sad fact is the world is full of douchebags,  a market condition that suggests investing in douchebags would be a terrible idea. Surely, a bushel of douchebags traded on the Chicago Mercantile Exchange would sell for far less than an equivalent weight of corn. After all, why would you pay a lot for a douchebag when you can practically get one for free? This glut of douchebags has kept their value extremely low.

Unlike gold.

So How Much Is My Gold Worth?

That depends. What time is it? As of this writing  gold is going for over $1600.00 an ounce. Not too shabby. But remember, that's $1600.00 an ounce for PURE gold, also known as 24 karat gold. If your gold is less than 24k then it will be worth less then pure gold, and you'll want to determine its true melt value. I won't go into the math. There are more than a few online calculators you can use to find the melt value of your gold, though you'll need to know the exact weight of your gold first.

Don't have a high-precision digital scale accurate down to 0.0005 of a pound just laying around to weigh your bling, and your drug dealing  neighbor won't let you borrow his?

Bring it to a jewelry store or pawn shop. They'll weigh it, tell you what it's worth and probably make you an offer. It's what they do.

How Much Will I Get?

Easy. Less than what it's worth. It doesn't matter where you bring your gold you'll NEVER get its melt value. That's because gold buyers have to make money ,too, lest you should think they're buying all of your unwanted gold out of the goodness of their hearts, bless 'em.

And they know the refiners.

No, you can expect to get anywhere from 40% to 60%  of the melt value (maybe a little more if you're a shrewd negotiator). And that's only what you can expect from a reputable business. Mail your gold away and you could receive far less, sometimes only pennies on the dollar. Think about it. Those mail-your-gold-in companies have to find some way too pay for all that postage and all those late night commercials, and it ain't by offering you 85 cents on the dollar for grandma Bonnie's gold earrings.

The bottom line is, you're almost always better off selling your gold to a local business. And I'm not talking about those shysters who pass through town a couple times a year and set up shop for the weekend down at the Holiday Inn, either. I'm talking established, tax paying businesses. Look around. Find a jewelry store, coin dealer or pawn shop in your area and let them appraise your gold for you. Now that you know what you can expect, chances are you won't be disappointed.

Then who knows? Flush with cash you just may decide to drop in on that neighbor of yours. You know, the one with the scale.