Gold prices soared above $1,700 an ounce Monday, giving those "We Buy Gold" billboards a new sense of urgency.
But local jewelers say you shouldn't expect to get the appraisal price or the market price for your scraps.
Like buying a house or a car, dealing in gold is a negotiation process. If you have a piece you think is particularly valuable, shop around for the best buyer. Besides jewelers, there are pawn shops and services that specialize in buying gold. You're safest to try long-standing local businesses, since they have a reputation to consider.
You also should remember that the market price for gold is based on pure gold, or 24 karat gold. Most gold jewelry is 10, 14 or 18 karat gold - meaning that your jewelry only contains 40 percent, 50 percent or 75 percent gold. As the karat of gold decreases, so does the amount of money you'll receive for it.
But the dip in your gain isn't guided solely by karats. As the selling customer, you are only the beginning of the golden journey. From you, the jeweler sends the scraps to a refinery who sells it to the manufacturer. The manufacturer makes new jewelry to sell to the jeweler. And that's the simple chain of events. Often, a few middle men are thrown into the mix, as well.
Each person in that chain has to make money, so that takes away from your bottom line.
Elaine Lidholm, director of communications for the Virginia Department of Agriculture and Consumer Affairs, gives these tips for finding a fair and reputable gold-buying service:
* Look for an approval or inspection sticker from Virginia on the scale.
* Witness the gold being weighed. It's perfectly reasonable to ask the goldsmith to test his scale in front of you.
* If you have questions about the accuracy of the scale, call the consumer affairs office and request that an officer check the scales.
* Seek an appraisal. Jewelry appraisals are often done for insurance purposes, but it can give you an idea of how much your piece is worth. Then you can decide whether you want to sell the gold or sell the jewelry piece as a whole.
* Check your local department of consumer affairs for complaints against specific businesses. You can also check the Better Business Bureau.
The Virginia Department of Agriculture and Consumer Affairs can be reached at 800-552-9963 or vdacs.state.va.us.Copyright © 2014, The Baltimore Sun