So a guy wanders into my shop a few months back with a plastic bag of mixed jewelry, all of it gold, albeit various karats. He says he'd like to sell it. I separate the karats into individual piles and start weighing and adding things together in order to come up with a price for him. As I'm doing this I look at the bag and realize the total weight I came up with is written on the outside of the bag rounded off to the nearest whole number. Underneath that number was the number 236. Before I totalled my numbers, this didn't mean anything to me as plastic bags are used and reused many times in the jewelry business so random writing is common to see. I realized that this fellow must have taken this gold elsewhere first. When I asked him about it, he confirmed that the 236 was his highest offer. He was shocked when I offered him $687. Did he sell his gold to me? No. After he walks out, I comment to my secretary that I thought I was being more than fair as his gold was pretty clean. A couple of days later he returns to sell me his scrap. I wonder if he went back to the place that gave him that offer to see if he could get them to come up. My guess is they tossed him out.
A girl comes to me several weeks ago, referred to my business by a another customer. She said she was told that I was real honest and would give her straight information. She pulls out a small bag of silver coins, about nine or ten dollars. There were Kennedy half dollars, a few quarters, maybe a dime or two. So I look over the coins and realize that most of them are dated after 1964, meaning that they are not silver, but nickel clad over copper. You can easily tell by looking at the edge. But there were a few older coins totaling three dollars or so that were silver. I explain to her that unless there is a rare year or mint mark which adds numismatic value, silver coins are worth x number of dollars face. In other words a silver dollar, two half dollars, four quarters or ten dimes are worth the same. Pretty simple, huh? So I tell her I'm not interested in the clad coins, just use them as change. But the three dollars of silver coins are worth $72. She thanks me very much but told me that she thought the lot should be worth a bunch more money. Her tone of voice was a bit insulting. At the time, my profit margin was three dollars so I didn't see anyway I could offer more. A few days later she trots in again, and says that she would sell me her coins. She said her highest offer was $12 for the entire lot, meaning someone offered her $2 additional for the silver. Her shoulders dropped when I told her "Well, now I'm not interested in your silver for $72". Meanwhile my secretary had already written the check which perked her back up. I explained to her I felt she had learned a very valuable lesson about treating people. Think about it, I probably spent more than thirty minutes with her for $3. It's all part of my get rich slowly scheme, so far so good.
Almost weekly I have a customer who hands me a bag of old broken stuff and and I mean stuff. Like safety pins, bottle caps, screws and the like, mixed in with a few items of costume jewelry, Timex watches, and plastic beads. To paraphrase an old expression "Everything that's yellow ain't gold". But every once in a while there is a treasure mixed with the trash. Kind of makes you wonder what their homes look like on the inside. A number of years ago a young lady shows me a bag of things heaped together she bought at a various garage sales. There were a few antique pieces that although they were costume they were cute. I pull out a little item that she comments she had bought downstate for $5. She showed this item to a couple of antique dealers but was told it wasn't worth anything. She really wasn't interested in selling anything, just fishing for information but I asked her if she would like to sell it anyway. I told her I might be interested in it for about seven hundred dollars. After I revived her, I explained that although it was silver, with a little gold trim, it was set with a mix of tiny diamonds, emeralds and pearls, perhaps dating from the early to mid 1800's. It was part of a much larger necklace that was now gone. I eventually did purchase and sell this piece, so it goes to show, one man's junk really is another man's treasure.
Almost every bag or box of costume that your Auntie Gertrude has saved seems to have at least one or two good items mixed in. I think this is because we all get forgetful with age. Things get tossed in a box and forgotten. The surviving family members really don't know what's good and what's not. While programs like The Antiques Road Show have done a lot to raise people's awareness of collectible antiques sadly lots of things end up in the town dump. Never be afraid to ask a knowledgeable person about items left to you. I don't charge to look over a basket of jewelry items and I'm guessing many other dealers don't either. All I ask is you pick out the dead bugs.
Monday, March 14, 2011
Gold Fever! (part3)
So is it better to sell now or should I be hanging on hoping gold prices go higher? Should I be buying gold as an investment? What about silver or platinum as an investment? All good questions. But what you really want to know is what I think metals prices are going to be in the future? Let me just clean the dust off my crystal ball and have a look. HMMMM....I'm not really getting a clear answer.
Remember, I am not an investment counselor. All I can say with confidence is that gold will always be worth the same as it was yesterday and last week and a hundred years ago. Huh? Absolutely! The value of gold really has never changed. For example, when I first started in the jewelery business in the early 70's a man's suit was about $70-90. My first car, a Chevy was about $2000. My first house, a three bedroom brick ranch in a modest neighborhood was $25,000. I supported a wife, a baby, and all the costs of living on $85 a week. Gold was $70 an ounce. The last man's suit I bought at a Men's Warehouse was about $1200 by the time I got two shirts, two pants and one necktie. The last car I bought, a Subaru was about $38,000. And the house I live in? A 1927 three bedroom bungalow in a modest neighborhood was recently re-accessed at just under $390,000. Now both my wife and I need to work to make ends meet and enjoy a few luxuries. As you can see, the cost of all these things has roughly increased about twenty times in the past forty years. Gold is now $1,400 per ounce. Twenty times higher than it was in the 70's. So what changed? A suit is a suit. A car is a car. A house is a house. Yes, I may have gotten an extra shirt, there might be a better radio in the car or better windows in the house. But shouldn't manufacturing have gotten more efficient too in forty years? What changed is the dollar. The buying power of the US dollar has dropped to about one twentieth from what it was forty years ago. Why is this? The main reason is our legislators and our government from the federal level all the way down to our local town officials have spent too much of our money. The federal government continues to print more and more money. We have huge deficits, bankrupt states, a slumped economy and high unemployment.
Consider that the American economy is nothing more than my household income, your household income, your neighbor's and so forth, all grouped together. If I overspent on my credit card, would spending more get me out of debt? Does raising my credit limit without paying down on my debt, making my debt to available credit ratio appear to make me a better risk? Of course not. But in effect this what our government is doing. Our politicians take more and more money out of circulation in the form of various taxes. Our legislators think that they can spend our way out of a recession. When actually they are guaranteeing that the US dollar will continue to weaken. Additionally our politicians think that they can tweak our economy by adjusting this or that. But that means they would need to know how the public thinks and what determines how we decide to spend our income. When in fact it is impossible to know how approximately 115 million households will react in a given circumstance.
The argument in favor of selling your old and unwanted gold and other precious metal jewelry is that by doing so you will have in hand a liquid amount of cash that can be used to pay down some high interest debt, purchase or repair something unexpected around the home, or pay against a tax bill. Even if your decide you'd rather use the money to purchase a luxury item that you might have otherwise charged, you're better off because you'll have the item now and not incurred any debt. There is also a risk of saving your gold hoping for a slight increase that may not offset the interest you will have to pay on an existing loan. For example if gold increases one hundred dollars, one ounce of 14K gold will only be worth about $53 more at the scrapper, a 7% increase. Compare that against a twenty plus percent credit card debt.
So why might you want to purchase gold, especially now that the price is so high? What should you buy and how much? While it might have been better to have purchased between May and June of 2001 when gold was less than $275 an ounce, I do not believe it's a bad idea even at this time. But you have to buy smart. One ounce gold coins, or bullion is the only way to go. It is an exact amount, an exact fineness and the gold price is easily posted and available, no questions. Many countries mint one ounce bullion coins. American Eagles, Canadian Maple Leafs, Chinese Pandas and Swiss Credits just to name a few. As it really makes no difference which you prefer, I suggest which ever has the lowest premium. You should be able to find bullion coins at only a few dollars over the current gold price, typically $50-100. When you decide to liquidate, the sell price should be about $5-10 under gold. Buy from a reputable dealer as there are lots of counterfeits around! As a plus, New York State allows sale of bullion coins for no sales tax as long as you spend more than one thousand dollars. The sales receipt has to have the total paid, the gold price of the day and the percent commission written on it. It should read: bullion for investment purposes only.
US silver coins (1964 and earlier) are also wise to invest in. With recent increases in silver pricing, millions of silver coins are going to melt. That means that collectible silver coins may become more rare. The down side of silver bullion is the weight. Currently $10,000 dollars in gold weighs just over 7 ounces, while the same in silver is over twenty three pounds!
Platinum bullion, while I do see it occasionally, it is available and the price is just as easily found, it is just not that common. When I sell platinum it seems there is a pretty hefty "hit" against what I expect to receive. I would tend to shy away from it.
As a hedge against the volatility of the US dollar I personally believe it is wise for every family that can afford it, have a little gold and silver bullion. If the price of gold goes up or down, it's pretty much irrelevant. It's the relation of gold to another tangible item you might need in an emergency that really makes a difference. In times of uncertainty you could travel across borders, or from disaster ravaged areas into safer places with enough gold coins in your front pants pocket to start a new life. This has happened repeatedly in the past and may be happening even now in some places in the world.
So do you want paper or tangible? I like tangible. I can sell it NOW and not need to wait a week or so to receive a check from some investment company while the market price fluctuates. If you are investing in gold with emergency preparedness in mind, purchasing precious metals in the form of a mutual fund might not be a good idea. While there are many very reputable companies the news of investment fraud and white collar crime makes me a bit wary. However diversifying some of your investment portfolio with a percentage of precious metals is a very good idea particularly over the long term.
Ultimately you need to decide what is right for you. What you are comfortable with without causing an undo hardship on your family and lifestyle. I've given you some good information and advice. So now, go forth grasshopper and prosper.
Consider that the American economy is nothing more than my household income, your household income, your neighbor's and so forth, all grouped together. If I overspent on my credit card, would spending more get me out of debt? Does raising my credit limit without paying down on my debt, making my debt to available credit ratio appear to make me a better risk? Of course not. But in effect this what our government is doing. Our politicians take more and more money out of circulation in the form of various taxes. Our legislators think that they can spend our way out of a recession. When actually they are guaranteeing that the US dollar will continue to weaken. Additionally our politicians think that they can tweak our economy by adjusting this or that. But that means they would need to know how the public thinks and what determines how we decide to spend our income. When in fact it is impossible to know how approximately 115 million households will react in a given circumstance.
The argument in favor of selling your old and unwanted gold and other precious metal jewelry is that by doing so you will have in hand a liquid amount of cash that can be used to pay down some high interest debt, purchase or repair something unexpected around the home, or pay against a tax bill. Even if your decide you'd rather use the money to purchase a luxury item that you might have otherwise charged, you're better off because you'll have the item now and not incurred any debt. There is also a risk of saving your gold hoping for a slight increase that may not offset the interest you will have to pay on an existing loan. For example if gold increases one hundred dollars, one ounce of 14K gold will only be worth about $53 more at the scrapper, a 7% increase. Compare that against a twenty plus percent credit card debt.
So why might you want to purchase gold, especially now that the price is so high? What should you buy and how much? While it might have been better to have purchased between May and June of 2001 when gold was less than $275 an ounce, I do not believe it's a bad idea even at this time. But you have to buy smart. One ounce gold coins, or bullion is the only way to go. It is an exact amount, an exact fineness and the gold price is easily posted and available, no questions. Many countries mint one ounce bullion coins. American Eagles, Canadian Maple Leafs, Chinese Pandas and Swiss Credits just to name a few. As it really makes no difference which you prefer, I suggest which ever has the lowest premium. You should be able to find bullion coins at only a few dollars over the current gold price, typically $50-100. When you decide to liquidate, the sell price should be about $5-10 under gold. Buy from a reputable dealer as there are lots of counterfeits around! As a plus, New York State allows sale of bullion coins for no sales tax as long as you spend more than one thousand dollars. The sales receipt has to have the total paid, the gold price of the day and the percent commission written on it. It should read: bullion for investment purposes only.
US silver coins (1964 and earlier) are also wise to invest in. With recent increases in silver pricing, millions of silver coins are going to melt. That means that collectible silver coins may become more rare. The down side of silver bullion is the weight. Currently $10,000 dollars in gold weighs just over 7 ounces, while the same in silver is over twenty three pounds!
Platinum bullion, while I do see it occasionally, it is available and the price is just as easily found, it is just not that common. When I sell platinum it seems there is a pretty hefty "hit" against what I expect to receive. I would tend to shy away from it.
As a hedge against the volatility of the US dollar I personally believe it is wise for every family that can afford it, have a little gold and silver bullion. If the price of gold goes up or down, it's pretty much irrelevant. It's the relation of gold to another tangible item you might need in an emergency that really makes a difference. In times of uncertainty you could travel across borders, or from disaster ravaged areas into safer places with enough gold coins in your front pants pocket to start a new life. This has happened repeatedly in the past and may be happening even now in some places in the world.
So do you want paper or tangible? I like tangible. I can sell it NOW and not need to wait a week or so to receive a check from some investment company while the market price fluctuates. If you are investing in gold with emergency preparedness in mind, purchasing precious metals in the form of a mutual fund might not be a good idea. While there are many very reputable companies the news of investment fraud and white collar crime makes me a bit wary. However diversifying some of your investment portfolio with a percentage of precious metals is a very good idea particularly over the long term.
Ultimately you need to decide what is right for you. What you are comfortable with without causing an undo hardship on your family and lifestyle. I've given you some good information and advice. So now, go forth grasshopper and prosper.
Saturday, March 12, 2011
Gold Fever! (part 2)
My previous post gave you a bit of background so that we can investigate further how this gold scrapping business works in the real world. I've explained how fineness and purity (how clean your scrap is) determines what I am going to pay you for your old gold, but other factors are in play too.
The total amount of gold you sell, and even the day you come in my shop makes a difference. The total amount of gold is important because if you give me several thousand dollars of scrap, I am happy to make a few hundred dollars profit, in other words a smaller profit margin. This is because there are lots of people scrapping and all these people take time. Again, time is money. It only takes a little longer to deal with someone with a large lot of scrap compared to someone who brings me a much smaller lot. Think of it as the difference between wholesale and retail. The day you come in makes a difference because if I will be holding your scrap for a week or two before I sell, gold prices could go up or worse, go down. I need to leave a tiny window so I don't take a "hit" too bad, or too often. Gold is a volatile commodity (more on this later). If I am currently ready to sell within the next twenty four hours, I can afford to be a bit more generous. Sorry, it does no good to call ahead to find out when I will sell next. Many times I do not know myself until minutes before the fact. Now why does it work this way? The answer is because I try to pay you very close to what I receive when I sell, typically within 10-15%. If I was paying out twenty cents on the dollar and keeping all your little diamonds for free, I could afford to hold out for weeks before I would need to sell.
So you look in the newspaper, or on the Internet and get the current gold price. You calculate out what you think you have, compensate for Karat, subtract a bit for stones and other unknowns, but you don't get offered that price. Why not? The short answer is: I don't get that price either, neither does the scrapper I deal with. I receive about 15-20% below the market gold price. No matter how much scrap you have, you don't have enough to deal directly with a refiner. There are minimum amounts that make it cost effective to refine, assay and process. I purchase gold from many people until I have a large amount and that takes time. I process the gold, removing stones, steel and other impurities. I separate the karats. I do all this because I will get the maximum value when I sell and I know exactly within a few dollars what I have. I need to purchase at a percentage below the market price of gold. I then take my lot to a scrapper, who determines if what I have brought is exactly what I say it is. They examine each piece to see if the karat is correct and the metal is clean. They then save up until they have a much larger amount, usually enough to fill a fifty gallon drum! They then bring it to a refiner and get paid, again a percentage below the market price. The refiner, using acids, separates the pure gold from the alloys and remelts it into bullion. At some point, they will re-alloy the pure gold into karat gold and form it into shot, stock, wire or sheet to be used again for jewelry. When the refiner sells their gold, they get a percentage above the market price. That "window" is their profit margin. The refiner will sell gold to a manufacturer or a caster who will make parts that are used in the jewelry business, such as heads, shanks, catches, earring posts and a multitude of other items. They then add a profit to their labor costs. Eventually I purchase parts or castings to be used in the manufacture of my custom jewelry. Roughly, the amount I pay for new gold parts is 300-400% or more than I receive when I liquidate my scrap! But consider the number of businesses that need to handle this metal and the amount of processes that your scrap has to go through to be recycled.
All this discussion about gold also relates to silver, platinum and other precious metals you might not be familiar with such as rhodium, palladium, iridium and so forth (the latter metals all being noble metals similar to platinum). Sterling silver is .925 so it's about ninety percent pure. Platinum is usually mixed with other rare earth metals and is usually 90 or 95% pure.
Silver jewelry is probably the worst dollar return when you sell your scrap. Silver jewelry is traditionally very high profit margin at a retail jewelry store. Most silver jewelry has multiple heavy layers of plating on the surface such as nickel, copper or chrome all done in an effort to stop tarnish. Both genuine and faux stones tend to be larger and heavier. Much silver jewelry has non-precious metal embedded to gain added strength. Silver jewelry that is not marked, may not be sterling but a lower fineness. Unfortunately silver used in jewelry is not easy to test for purity, so buyers figure accordingly. However, silver flatware or coins always bring a return very close to the market price. The one thing to remember is that knives have stainless steel blades and hollowware may be filled with shellac or plaster.
Since a comparatively small amount of jewelry is made of platinum, it will need to be held a much longer period of time in order to have a significant amount. Platinum prices also fluctuate just like gold. Therefore when purchasing platinum it is necessary to use caution when determining a value.
The best gold to scrap is all that ugly stuff from the sixties and seventies. Broken jewelry, watches and even dental fixtures like crowns and bridges are all good items to consider. All the light weight things that have been so popular the last few years are perfect. However you might want to think twice and then think again about selling grandma's antique broach. Fifteen minutes after you sell your scrap, it's crushed. Therefore, selling your favorite uncle's tie tack might not be a good idea. So use some thought when selling your used jewelry and old gold.
Thursday, March 10, 2011
Gold Fever! (part 1)
With gold prices at the highest they have ever been, everyone seems to have a bit of gold fever. It's hard to help it as we constantly are being deluged with ads telling us to "sell your old, broken and unwanted gold jewelry", or "we pay the highest prices". However, almost simultaneously we are being told now is the time to buy gold! Buy...Sell....Buy....Sell. So which is it? How do you know you are being treated fairly? How do you get the most from your transaction? Is gold a good investment? These are all important questions and things to consider when dealing with any commodity, not just gold.
First of all, consider this: all this advertising costs a LOT of money. TV, radio and newspaper ads are not cheap. Yes, the more a business advertises with a certain medium, the cheaper it is per ad. However, it is still expensive. A small local retail jeweler told me he spent over one million dollars from Thanksgiving to Christmas for advertising. For all that money, I never even saw one of his ads. So imagine how much some of these large chain stores such as Kay's or Littman's spends during a minor event such as graduation sales, let alone during the holiday season. How many jewelry ads do you hear in a row? Imagine how many millions of dollars are being spent just within your listening area. So here's the question: Where do you think this money comes from? It comes from you. If it was not profitable for these companies they wouldn't do it.
Businesses that purchase gold from the public have to make a profit. That's why they do it. Yes, I make a profit too. The question is: How much profit is fair? When you go to the grocery store, they have items on the shelves you need. You either purchase that loaf of bread or not, based upon what the price is. If it's too much, you'll walk away in hopes of finding a more agreeable price at another store. A grocery store has to decide exactly how little they can sell that bread for, pay their advertising, salaries, mortgage, insurance and a myriad of other costs and still make a profit. They really want to sell that bread for as little as possible because they don't want you to walk out looking for a better deal elsewhere. Well, the same is true for businesses that purchase gold, except in this case they are trying to pay you the maximum they can so you don't leave. All the expenses have to be offset by profit margin. The main difference is that You are walking out with the money after you hand over your old jewelry. The main thing to consider is that your gold is the purchasing agent for the money you receive. "Gold is the same as money" as my father used to say.
Gold is traditionally sold by the "Troy ounce". Named after Troyes, France, the troy system of weights is known to exist in medieval times. A Troy ounce is approximately 1.1 "Avoirdupois ounce" which is the typical unit used in the grocery store, post office or your kitchen scale. Troy weight is also twelve ounces per pound unlike the sixteen ounces in an Avoirdupois pound. A Troy ounce can be split in smaller units called pennyweights, abbreviated DWT. The D stands for "denarius" named after an old Roman coin. The term "pennyweight" is from the original British pound sterling monetary system. Two hundred forty British pennies weighed the same as one pound sterling.
As if that isn't confusing enough, many jewelers today use "gram weight" when dealing with precious metals. While this is not traditional, it is a metric system used in many places in the world. There are 31.1 grams in a Troy ounce. Grams are smaller than pennyweights, so compared to the pennyweight system, it looks like you have more metal, when in fact it is just another unit of measure.
Now here's another thing to consider: Gold comes in different "Karats" or fineness. Fine (or pure) gold would be 24 Karat (1.0000). Generally fine gold is marked .999 or .9999 or .9999/1.0000 or something similar. Most jewelry is a lower fineness such as 18K (.750), 14K (.585) or 10K (.417). An ounce of 10K is worth about half of an ounce of 18K. An ounce of 18K is worth 75% of an ounce of 24K. When I or any other jeweler purchases your broken jewelry, I need to separate the Karats, and weigh the individual piles, then add the amounts for a final total.
To further complicate matters, your gold has to be CLEAN. That means: no stones, no steel springs (as in lobster clasps, cuff link backs and lever earring backs), no glue or fillers, and as little solder as possible. All those things add weight which can skew the total value. An example of clean gold would be a basic wedding band. Almost no one has clean gold. Most people give me items with tiny stones, spring catches, and such. Removing all this takes time. Time is money. That said, some stones can be reused, as can some catches and the like. So while I need to mentally decide the cost of cleaning you scrap, I also figure what the stones and other parts are worth to me which offsets a lot of this labor. If you tell me you want your stones back, you will get less money than if I can use them. Consider that most gold buyers do not pay anything for any stones. There is a HUGE amount of money being made by unscrupulous buyers telling you that your stones are not worth anything. Some stones are so inexpensive to replace, such as onyx, garnet, amethyst, pearl and such that they rarely have any value on the used market.
In other words, you can not just throw your old jewelry on your postal scale and figure out what you should receive in cash. My best advice is to talk to the person you wish to sell your scrap gold to. It's OK to ask questions. Find someone who gives you straight answers that you are comfortable with. Deal with someone who has an established business and location. Someone who comes to town and sets up a business in a hotel room, who blankets the area with ads, offers to pay "up to" some sky high amount (but really never does), then packs up and is gone tomorrow never to be seen again, is probably not the smartest place to do business. How do you know that packing up your jewelry and mailing it to some "national refiner" who proposes to cut out the "middle man" in order to pay the "highest prices" for your unwanted jewelry is really doing that? Do the paid actors waving money in front of the TV camera convince you? Get real.
First of all, consider this: all this advertising costs a LOT of money. TV, radio and newspaper ads are not cheap. Yes, the more a business advertises with a certain medium, the cheaper it is per ad. However, it is still expensive. A small local retail jeweler told me he spent over one million dollars from Thanksgiving to Christmas for advertising. For all that money, I never even saw one of his ads. So imagine how much some of these large chain stores such as Kay's or Littman's spends during a minor event such as graduation sales, let alone during the holiday season. How many jewelry ads do you hear in a row? Imagine how many millions of dollars are being spent just within your listening area. So here's the question: Where do you think this money comes from? It comes from you. If it was not profitable for these companies they wouldn't do it.
Businesses that purchase gold from the public have to make a profit. That's why they do it. Yes, I make a profit too. The question is: How much profit is fair? When you go to the grocery store, they have items on the shelves you need. You either purchase that loaf of bread or not, based upon what the price is. If it's too much, you'll walk away in hopes of finding a more agreeable price at another store. A grocery store has to decide exactly how little they can sell that bread for, pay their advertising, salaries, mortgage, insurance and a myriad of other costs and still make a profit. They really want to sell that bread for as little as possible because they don't want you to walk out looking for a better deal elsewhere. Well, the same is true for businesses that purchase gold, except in this case they are trying to pay you the maximum they can so you don't leave. All the expenses have to be offset by profit margin. The main difference is that You are walking out with the money after you hand over your old jewelry. The main thing to consider is that your gold is the purchasing agent for the money you receive. "Gold is the same as money" as my father used to say.
Gold is traditionally sold by the "Troy ounce". Named after Troyes, France, the troy system of weights is known to exist in medieval times. A Troy ounce is approximately 1.1 "Avoirdupois ounce" which is the typical unit used in the grocery store, post office or your kitchen scale. Troy weight is also twelve ounces per pound unlike the sixteen ounces in an Avoirdupois pound. A Troy ounce can be split in smaller units called pennyweights, abbreviated DWT. The D stands for "denarius" named after an old Roman coin. The term "pennyweight" is from the original British pound sterling monetary system. Two hundred forty British pennies weighed the same as one pound sterling.
As if that isn't confusing enough, many jewelers today use "gram weight" when dealing with precious metals. While this is not traditional, it is a metric system used in many places in the world. There are 31.1 grams in a Troy ounce. Grams are smaller than pennyweights, so compared to the pennyweight system, it looks like you have more metal, when in fact it is just another unit of measure.
Now here's another thing to consider: Gold comes in different "Karats" or fineness. Fine (or pure) gold would be 24 Karat (1.0000). Generally fine gold is marked .999 or .9999 or .9999/1.0000 or something similar. Most jewelry is a lower fineness such as 18K (.750), 14K (.585) or 10K (.417). An ounce of 10K is worth about half of an ounce of 18K. An ounce of 18K is worth 75% of an ounce of 24K. When I or any other jeweler purchases your broken jewelry, I need to separate the Karats, and weigh the individual piles, then add the amounts for a final total.
To further complicate matters, your gold has to be CLEAN. That means: no stones, no steel springs (as in lobster clasps, cuff link backs and lever earring backs), no glue or fillers, and as little solder as possible. All those things add weight which can skew the total value. An example of clean gold would be a basic wedding band. Almost no one has clean gold. Most people give me items with tiny stones, spring catches, and such. Removing all this takes time. Time is money. That said, some stones can be reused, as can some catches and the like. So while I need to mentally decide the cost of cleaning you scrap, I also figure what the stones and other parts are worth to me which offsets a lot of this labor. If you tell me you want your stones back, you will get less money than if I can use them. Consider that most gold buyers do not pay anything for any stones. There is a HUGE amount of money being made by unscrupulous buyers telling you that your stones are not worth anything. Some stones are so inexpensive to replace, such as onyx, garnet, amethyst, pearl and such that they rarely have any value on the used market.
In other words, you can not just throw your old jewelry on your postal scale and figure out what you should receive in cash. My best advice is to talk to the person you wish to sell your scrap gold to. It's OK to ask questions. Find someone who gives you straight answers that you are comfortable with. Deal with someone who has an established business and location. Someone who comes to town and sets up a business in a hotel room, who blankets the area with ads, offers to pay "up to" some sky high amount (but really never does), then packs up and is gone tomorrow never to be seen again, is probably not the smartest place to do business. How do you know that packing up your jewelry and mailing it to some "national refiner" who proposes to cut out the "middle man" in order to pay the "highest prices" for your unwanted jewelry is really doing that? Do the paid actors waving money in front of the TV camera convince you? Get real.
Tuesday, March 8, 2011
My first post...hey ya gotta start somewhere!
Confucius said "A journey of a thousand miles begins with a single step." And that's just how I feel about starting a blog. Oh, not that I don't have enough to say. On the contrary, it's more like there is so much I'd like to share about the jewelry business from the view point of a goldsmith that I feel as overwhelmed by a "cyber-journey" as perhaps an early explorer venturing into the unknown.
Foremost is the thought: would anyone really be interested in reading these ramblings or am I doing it for my own vanity? I've thought for years I ought to write a book. A complete "tell it all" not only giving hints to the average consumer but explaining the way things really work in the jewelry business. I could spice it up with stories about some of the wacko and not so wacko people I've had contact with. I suppose it might alienate some business associates or some of my customers might think I am pointing a finger of ridicule at them. And that's not the point of this blog. The point is to disseminate information, educate, and put you at ease while dealing with your family jeweler or someone in the jewelry business. If we both have a bit of fun along the way, so much the better.
Perhaps I should tell you that I am a third generation goldsmith. I started working as an apprentice for my father before I graduated from high school. That gives me forty (!) years of experience behind the bench, actually making, setting, repairing, designing and appraising every type of gold, platinum and silver jewelry and gem stones. I do this for a very select clientele and several major and minor retail jewelry stores and antique dealers. My hands are stained black and full of cuts and callouses. That's because I actually pick up tools and work with my hands on hot metals. Unlike the salespeople you meet at most retail stores I do not wear a tie, my shirts have burn holes and acid stains. My shop is just that, a shop. Tools and dust everywhere. In contrast to the dustballs residing under your bed at home, the grime here is valuable for it is the byproduct of gold polishing.
My pedigree isn't too bad either. My grandfather Magnus, was personal jeweler for the king of Denmark before he and my grandmother emigrated to the United States in the 1920's. My grandfather worked for Georg Jensen in New York City before moving upstate to become the goldsmith for a well respected guild store in Albany, NY by the name of Van Heusen Charles. Some time in the 1930's he opened a wholesale-retail trade shop on Maiden Lane, downtown Albany. It was around this time that my father as a boy started his apprenticeship. My grandfather passed away in 1960 leaving the business in my father's hands. Eventually my father moved the business to Colonie on the outskirts of Albany. In the 1970's both my brother and I started in the family business, which my brother still runs today. I started my own business in 1980 or so, in Delmar, NY. This is where I still am today.
Besides fourteen years of apprenticeship, I have completed studies with the Gemological Institute of America, and SUNY Albany, and am currently working with CAD design of jewelry. During my forty years on the bench I have seen just about everything, heard every story from my clients. I've seen the good, bad and ugly when it comes to jewelry. While I may not know everything, I know more than you, so listen up!
Foremost is the thought: would anyone really be interested in reading these ramblings or am I doing it for my own vanity? I've thought for years I ought to write a book. A complete "tell it all" not only giving hints to the average consumer but explaining the way things really work in the jewelry business. I could spice it up with stories about some of the wacko and not so wacko people I've had contact with. I suppose it might alienate some business associates or some of my customers might think I am pointing a finger of ridicule at them. And that's not the point of this blog. The point is to disseminate information, educate, and put you at ease while dealing with your family jeweler or someone in the jewelry business. If we both have a bit of fun along the way, so much the better.
Perhaps I should tell you that I am a third generation goldsmith. I started working as an apprentice for my father before I graduated from high school. That gives me forty (!) years of experience behind the bench, actually making, setting, repairing, designing and appraising every type of gold, platinum and silver jewelry and gem stones. I do this for a very select clientele and several major and minor retail jewelry stores and antique dealers. My hands are stained black and full of cuts and callouses. That's because I actually pick up tools and work with my hands on hot metals. Unlike the salespeople you meet at most retail stores I do not wear a tie, my shirts have burn holes and acid stains. My shop is just that, a shop. Tools and dust everywhere. In contrast to the dustballs residing under your bed at home, the grime here is valuable for it is the byproduct of gold polishing.
My pedigree isn't too bad either. My grandfather Magnus, was personal jeweler for the king of Denmark before he and my grandmother emigrated to the United States in the 1920's. My grandfather worked for Georg Jensen in New York City before moving upstate to become the goldsmith for a well respected guild store in Albany, NY by the name of Van Heusen Charles. Some time in the 1930's he opened a wholesale-retail trade shop on Maiden Lane, downtown Albany. It was around this time that my father as a boy started his apprenticeship. My grandfather passed away in 1960 leaving the business in my father's hands. Eventually my father moved the business to Colonie on the outskirts of Albany. In the 1970's both my brother and I started in the family business, which my brother still runs today. I started my own business in 1980 or so, in Delmar, NY. This is where I still am today.
Besides fourteen years of apprenticeship, I have completed studies with the Gemological Institute of America, and SUNY Albany, and am currently working with CAD design of jewelry. During my forty years on the bench I have seen just about everything, heard every story from my clients. I've seen the good, bad and ugly when it comes to jewelry. While I may not know everything, I know more than you, so listen up!
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