Canadian Finance Blog

Posted: 27 Aug 2011 02:00 AM PDT

Many people are still hurting from the poor show of the economy in the last few years. Those looking for new ways to bring in funds have the opportunity to sell gold they don't use- as the price of gold is at its highest in history.

As gold continues to increase, this will be a reliable recourse at any point in the foreseeable future. If you’ve never sold gold before, this article is meant to prime you on the basics of the trade.

How Gold is Sold

Gold items can be sold either for their worth as a retail item or for their raw materials. It almost always makes more sense to sell a gold item for its retail price, though, since there is additional value in a piece that represents some sort of skilled labor or historical significance.

When you sell gold for its scrap value, nothing is taken into consideration but the gold’s purity. Pieces that are produced by a prestigious jeweler, are antiques, or are handmade or unique can all fetch the same price as a similarly sized gold lump, as long as they share the lump’s purity.

Appraising Gold

Although the value of an item’s craftsmanship or antique value is the trickiest part to appraise, the purity of the gold is an important factor in the final price of any item as well. Gold that is of a higher purity will naturally fetch a higher price than gold that is tainted with other materials. Gold purity is measured in “karats.” A karat is defined as 24 times the purity of gold by its mass. For example, gold of 24 karats is almost 100% pure gold, while 18 karat gold has a purity of 75%, and 12 karat gold has a purity of 50%, and so on.

Don’t be satisfied with your first appraisal. Different buyers may take different things into consideration when you offer them a gold item. If your item is an antique, an item of prestigious manufacture, or has some other unusual or unique characteristics, it may fetch a higher price depending on who you present it to.
Don’t settle on the first person to make you a respectable-sounding offer. Sometimes your appraiser will claim that your piece is worth far less than it actually is so that they can make a larger profit on it. Therefore, get your item appraised by several experts and shop it around. This way you’ll get the highest price possible.

Do Your Homework

When at all possible, do your own research on the piece you’re trying to sell. This will ensure that even if you don’t find the highest price available for your piece, you will certainly avoid being conned. If the item you intend to sell is unique or obscure, this can be difficult, but good information is often available. Any knowledge about your piece will increase your bargaining power, so research is always a must.

Different buyers will have different policies on trading gold items. Especially if the item in question was made by your buyer, they may be willing to pay you in cash or trade it for something else in their stock. However, when trading gold items, you must be very thorough when researching the pieces in question so that you will ultimately make a profit.

These are some things to consider when selling gold. It is meant only as a jumping-off point for further research. It’s most important to be armed with specific knowledge about your piece; ideally, before you offer it to anyone, you will have a good idea of its value already.

If you’re careful, you can make a good profit on gold this way.

Tips for Selling your Gold for Cash originally appeared on Canadian Finance Blog on August 27, 2011.