Don't Sell Your Gold Until You Read This!

There has always been an inverse relationship between the confidence that people have in the global economy and the value of gold. Gold is perceived as a hedge against currency instability and economic fear. The more the economy slides, the higher the price of gold goes.

Most people are less concerned with diversifying their portfolio than they are interested in selling their old gold jewelry for a boatload of cash. However, most people have enough sense to realize that the owner of the 24-hour check cashing and payday loan emporium who recently started paying “CASH 4 GOLD” may not be the most dependable member of the local business community. Protecting yourself involves understanding a few important aspects of the cash for gold market.

How is Your Gold Being Measured?

The system in place for dealing with precious metals is confusing and easy to game. For starters, gold is measured using the Troy ounce, which, unlike its more recognized cousin, the standard ounce (28 grams), is actually equal to 31.1 grams. Additionally, when it comes time to actually weigh the gold in store, many buyers will use a system of pennyweights, which are actually each equal to 1.555 standard grams, or, 20 pennyweights per Troy ounce.

Basically, this system allows the buyer to make several conversions during the purchasing process, each of which presents an opportunity to “steal” from the seller. If the buyer tells you that you have an “ounce” of gold when they actually mean a Troy ounce, then quote you a price based on grams, they have already stolen 3.1 grams of gold from you. If they then take it a step further and measure the gold using pennyweights while claiming to be using grams, then you could be receiving as little as half of the actual market value for your gold.

Even if you don’t fully understand how you are being ripped off, a little bit of knowledge goes a long way. If you just slip pennyweight and Troy ounce into the conversation most dishonest dealers will be paranoid enough that you know what you are talking about to give you an honest deal anyway.

Not all Gold is Created Equal

Jewelry dealers or gold buyers are under absolutely no obligation to tell you that the “crappy old necklace” you got from your grandma when you were a kid is actually a rare piece from the obscure first collection of a popular 18th century designer. While telling your grandma you need to know where the necklace came from because you want to sell it isn’t generally an option, it does pay to do at least a little bit of research.

Being broke, especially around the holidays, feels rotten. But unless you’re a starving college student, most of the time it pays to slow down, shop around and look for the best deal. Besides, you never know when your grandma is going to want you to wear her necklace to Christmas dinner.