Things You Must Know Before You Scrap Your Gold and Silver Jewelry: How to get Maximum Profit

Chances are in today's tough economy, you have considered selling your gold and silver jewelry for a cash payoff. While doing this normally equates to instant cash, there are things you must know before hand before you take your valuables to a Recovery Company to get the maximum value for your items and to avoid being taken advantage of by an unscrupulous buyer.

To calculate the potential value of your items, it is important to understand how the value of gold and silver are measured. When a buyer calculates the value of your jewelry, he will measure the amount of "grams" in your jewelry.

Gold values you see on stock market reports are derived at a price per "Troy Ounce" of gold. There are 373 grams of in a Troy Ounce. To find your gold value, you must check the current daily stock value of gold per Troy Ounce. You can divide the current value of gold by 373 grams to find out how much you can expect to earn per gram. This will also give you an idea of whether or not an offer to purchase your gold by a buyer is fair.

Before you sell your gold, it is important to monitor the current price of gold. A year ago, a buyer could earn over $3000 per troy ounce. The current price of gold today is less than $2000 per troy ounce. At the time this hub was written, gold per troy ounce is $1750.32. This means your gold is worth $4.69 per gram.

Gold prices fluctuate considerably over the course of a month. By understanding this fluctuation and monitoring the market, you can wait if possible to cash in your items when the market is a little more generous. During stock market crashes and downturns, the market for gold falls and this can make a huge difference in your profits.

Prices of gold are based on a 24k gold standard. The lower the karat of gold of your item, the lower the profit you will make. Based on a market value previously established, the price per "karat" varies considerably.

For example, a 5 gram gold necklace in 10k gold at today's value would be worth: $117.26

a 5 gram gold necklace in 18k gold at today's value would be worth: $210.98

a 5 gram gold necklace in 24k gold at today's value would be worth: $281.27

While these calculations explain the "worth" of your gold, you must remember that the Buyer will not offer you this amount as they will keep a percentage for profit.

All true gold jewelry will display its own Karat value somewhere on the piece. The karat value is normally found on the tag of a standard necklace. The value of rings is normally imprinted on the underside of the ring. You can locate the karat value of jewelry with a magnifying glass.

(When a Buyer wears the "eyepiece" to examine jewelry, this is normally what they are looking for.)

The Buyer will test all your jewelry with an acid stone. This does not harm your jewelry. It tells the Buyer the karat value of the piece and lets the Buyer know your piece is authentic.

Jewelry that does not have a karat stamp on it is probably commercial grade and probably has no value.

The profits of silver are CONSIDERABLY less than profits from Gold. In 2011, the price of a gram of silver is $1.06. Necklaces made of silver are very light and do not offer much profit. The typical weight of an American Silver Dollar is 26 grams giving large silver coins an estimated value of $27.56 minus the Buyer's profit during purchase.

The amount of profits for any piece of jewelry is set at the discretion of the Buyer. As an experienced, prepared seller of jewelry, the amount of profit collected by Buyers varies by HUNDREDS of dollars by Buyers.

When taking my jewelry to be evaluated, I have taken the same 18k ring to three different Buyers. The first company, a private Mom and Pop store offered me $89 for it. (Thankfully I was an educated seller who knew that this was a VERY underhanded price). A second private company offered me $127. Not bad, but since I knew the gold value of the piece was $187, I continued getting comparison offers. Out of curiosity, I tried a chain Buyer called "Gold King" which had a sign on the door, "Best Gold Prices Offered." I figured it would be worth a shot. To my surprise, the Buyer offered me $156 for the ring and I accepted his offer.

Even if you are in desperate need of cash, it is imperitive that you research the value of your items before hand so you don't sell your valuables at a major loss.

No matter how valuable your watch is, there is no scrap metal value in it and Buyers will not accept them. Because watches are made of stainless steel and GOLD PLATED, they have no scrap value. Pawn shops rarely accepted watches because they have little used value. Do not expect to make any profit from watches of any brand name.

When taking your scrap gold to a Buyer, it is important to know that the buyer will NOT consider the value of any diamonds, no matter how valuable, in the offer they make you. These buyers may recover the diamonds, but you will not be reimbursed for the value of any stones.

The decison to cash in your jewelry is a personal and sometimes painful sacrifice. If you are in dire straights and looking to cash in any piece of jewelry that is meaningful to you, consider taking it to a reputable Pawn Shop instead of scraping it. Many Pawn Shops will hold your item and give you a loan based on the value of the item. This will give you the option to buy your jewelry back at a later time.