How Much Is My Old Gold Jewelry Worth?

Everywhere you look today, there is someone clamoring for your old gold jewelry. Late night cable TV ads, full page newspaper spreads, billboards, pawn shops and jewelry stores - they all want to get your attention. Additionally, Cash for Gold stores seem to be popping up in every strip mall with a vacant space. Obviously, there is money in old, scrap gold. With the current escalating prices for gold, many people are listening to these pitches. Especially with a struggling economy, many people may need a little extra cash to make ends meet, and selling old gold jewelry that you don't use any more is one way to put a little extra cash in your pocket.

But before you start on the process to sell any old gold that you have, you need to determine if what you have is scrap gold or if it's valuable jewelry. An antique or unique bracelet or necklace may have much more value as the beautiful jewelry it is, rather than just getting scrap value for it. Scrap value is always going to be less, since you aren't going to receive anything for the workmanship that went into the piece.

However, if you find yourself in a position where you MUST sell, and can't find a jewelry buyer (not an uncommon situation - times are tough and your piece would need to be really unique to fetch a good price), then you may need to settle for scrap gold prices. And if it's broken or out-of-style, it probably is just that - scrap gold.

How Do I Know if I Have Scrap Gold?

Telling the difference between scrap gold and valuable jewelry can be difficult for a variety of reasons. Here's a list of points to consider:

• First and foremost, identify the sentimental value of your items. Grandma's old wedding ring may be a family heirloom that you want to pass on to following generations. If that's the case, keep it. But you must be fully aware that a scrap gold buyer won't pay a single penny for sentimental value. Everything they buy gets thrown into a big pile and then melted down into a lump of metal.
• Second, look for damage. A nick or a scratch on an antique dresser adds 'character' to the piece, but people don't want jewelry that's damaged. If your gold is bent, kinked or otherwise damaged, it will probably be very difficult to get anything but scrap value out of it.
• Third, think about current styles. Do you still wear your psychedelic shirts and bell bottom pants? Probably not, and the same thing applies to trends in jewelry. Things that used to be all the rage may look a little silly now. Even if it brings back good memories of the old days, honestly ask yourself if anyone is wearing this anymore.

There are several important steps to take, though, BEFORE you decide who should get your business. Don't believe the hype! They can't all be THE NATION'S TOP BUYER with THE HIGHEST PAYOUTS, can they? If you see vague claims like, "The highest payout in the nation" or, "Get 3 times more" just keep walking. Any reputable gold buyer will back up their offers with facts.

How to determine the value of your gold

1. Understand the players. For a simple rundown of the main types of buyers, take a quick look at Where Should I Sell Unwanted Gold? to see who merits consideration. Stay away from the Internet mail-in companies. They are notorious for offering scandalously low prices. You might also want to be leery of these Cash for Gold stores that have popped up in the vacant spot in your local strip mall. These tend to be people who are looking to make a quick profit - at your expense. Check with the Better Business Bureau to see what sort of complaints have been made against them.

2. Know what you have. Most solid gold jewelry will be marked by karat. This is understandable, since gold is something to be proud of. If it isn't marked, it might be gold filled or gold plated, rather than solid gold. Filled or plated pieces don't have any real scrap value, so set those aside. Most gold buyers will only give you a few cents for these, if they buy them at all. You should still bring them with you, since you might have an unmarked piece, or the marking may have worn down, broken off or is simply too small to see.

Another simple test is to run a magnet over the gold. Solid gold jewelry won't react to the magnet. If the piece jumps to the magnet or is even a little attracted, it is probably not solid gold. The exception will be clasps on bracelets or necklaces or earring posts. Since you can't make a spring out of gold (it's too soft and won't spring back), sometimes those parts will be steel and are magnetic. If the rest of the piece doesn't react, bring that along, too. PLEASE NOTE: This test doesn't prove that what you have is gold - it just helps to quickly eliminate some of the pieces that aren't gold.

3. Divide your gold into piles based on karat - 10KT, 14KT, 18KT, etc. Since 24 KT is pure gold, 10 KT is 41.7% gold (10/24), 14KT is 58.3% gold (14/24) and 18KT is 75% gold (18/24). This will let you determine approximately how much actual gold is in each pile. If you just can't determine, play it safe and put it in the 10KT pile. If it's purer, you'll get a nice surprise! The buyer will be able to determine the actual gold content.

4. Weigh each pile - in grams, if possible. One Troy Ounce of gold is 31.1 grams. Remember that this is not going to be completely precise. Many Internet companies will only make you an offer after they have melted the jewelry and determined the exact amount of gold that is actually in the piece, after all impurities, small stones and other metals are excluded. If there are small semi-precious stones that haven't been removed, they will skew the weight higher. Even diamonds, if they aren't bigger than a quarter carat or so, don't have much value right now. Write down the total weight of each pile of each karat.

5. Check the current Spot Price of gold. One good source is Kitco.com. Realize that this can change, minute by minute, but it is a good starting point. Take this value and divide by 31.1 and then 24. This will give you the price per gram per karat, based on pure gold. If you are worried about the constant fluctuations in the price of gold, be sure to read my Hub on When is the Best Time to Sell My Old Gold Jewelry?

For example: If the current Spot Price is $1000, then $1000 ÷ 31.1 ÷ 24 = $1.34 per karat per gram.

6. Calculate the value of your gold. If you have 8 grams of 10KT gold, then $1.34 X 8(grams) X 10(KT) = $107.20. If you have 10 grams of 14KT gold, then $1.34 X 10(grams) X 14(KT) = $187.60. And so on.

IMPORTANT: This is NOT what you will be offered. This is the value of the pure gold after all the processing and refining and extracting. These steps, along with commissions and profits (this is a business, after all) all cost money. You will be offered some percentage of these totals. Experienced buyers will also be able to spot things like large semi-precious stones (think of a man's class ring) and will compensate with their offer.

7. Calculate a range of offers that you would accept. In the above example, you would have a ballpark figure of $294.80 worth of gold (once it's refined). Anything less than 30% ($88.44) is scandalous; 50% ($147.40) might be acceptable as a minimum offer; 80% ($235.84) or more would be excellent - but isn't very likely.

Armed with this information, you can at least make an informed decision. The key is to have the buyer explain their offer and the process they went through to get to it. If you had a piece that turned out not to be gold, it will affect your estimate. If there are a lot of small stones, that can also influence the offer. The key is to be informed enough to understand the process. And, informed enough to ask intelligent questions if you get an offer that seems completely off the mark. Don't be dogmatic; be reasonable and expect the same in return.

Also, this is a good reason to try to deal with someone face-to-face. That way, you can at least ask the questions. Now that you know how the value is calculated, you should be able to tell if the person you are dealing with is treating you in an honest, straightforward manner. If you aren't satisfied by the answers you get, you can walk away.

Disclaimer: In the interest of full disclosure, it should be stated that the author is the owner of South Kansas City Gold Buyer, a local scrap gold buyer based in Kansas City. For more information about this business you can visit sokcgoldbuyer.com.