How do you make sure that the gold jewelry you just got tipped on will turn a good profit? Where do you profitable gold jewelry, and what should you look for when buying gold jewelry for sale?
This article shares some insights into what you need to do and also what to avoid when buying gold jewelry you can profit from.
How to buy gold jewelry for profit
It’s worth noting that gold is one of the precious metals with a deep history, and it is regarded as one of the most valuable metals, especially for trading. Entire human civilizations and economies have been run on gold, and even from the earliest days, kings and their armies would go to war over the shining noble, precious metal.
While people no longer go to the actual sword, arrows, and fire wars anymore, gold remains a valuable metal. In international trade, for example, gold is used as a critical basis for currency exchange. Gold is also one of the very few precious metals that’s often used in fighting inflation, and also it’s used as a basis for numerous important investments that span across countries and continents.
The primary reason for the popularity of gold in world economies is that this precious metal never really loses its value but gains value. Gold retains its value across time, whether you are looking at freshly mined gold or the old and dusty gold pieces or jewelry.
Now, if you are thinking of investing in gold, the easiest path for you would be through gold jewelry. There are countless gold jewelry dealers making a good living off the trade through the purchase and sale of used, pre-owned, old, and newer gold jewelry. And as long as you have the right information about this investment opportunity, you could easily run a rather lucrative business. You only need how to conduct the business, which is where we come in.
In the next sections of this article, we’ll look at some of the features and factors to consider when buying gold jewelry, specifically, for profit.
1.What’s the value of gold? Spot Price?
Unlike anything else you may be interested in purchasing, the value of gold is set daily by the Global Gold Market. This price set is known as the Spot Price. What this pricing structure means is that you must check out the price of gold each day before buying the gold pieces because the set price determines whether you’ll profit off the gold or not, and if you make a profit, will it be little or substantial?
You’ll find the spot price of gold from websites or magazines run by precious metals dealers. Keep in mind that the spot price given for gold for the day is the price or a single troy ounce of the 24K gold. The good news is that if you are serious about the business, the internet is flooded with resources that will guide you on how to buy gold and profit off of it.
In this guide, we’ll help you make the right choices by offering tips and tricks to ensure that you buy and sell gold jewelry at a good profit.
2.Measuring/ Determining the Value of Gold
A crucial step to take into account when looking to buy gold is to first determine the actual value of the gold. If this is the first time you are doing this, you may want to take a little more time familiarizing yourself with the different numbers and abbreviations that are used, as well as the percentage and what they mean. These numbers are essential when it comes to the determination of the actual value of the gold. Now, there is some math involved, but nothing overwhelming.
This is what we mean – gold karatage (K or percentage purity of gold) and percentages
24K gold is gold with a percentage purity of 99.9% or higher;
22K Gold contains 91.6% pure gold
21K gold translates to 87.5% gold
20K gold is 83.3% gold
18K gold is 75% gold
15K gold is 62.5% gold
14K gold is 58% gold
12K is 50% of gold
10K translates to 42% gold
09K equals 37.5% gold
08K equals 33.3% gold.
That said, you should know that the most common variations of solid gold jewelry in the USA include 24K, 22K, 18K, 14K, as well as 10K. Anything below 10k gold is considered too impure to be valuable solid gold. In other European countries, however, jewelry of 6K or 8K gold will be considered pure gold.
The tricky part, however, is the math behind the value of the gold. This is quite important, especially when you are considering scrap jewelry where the piece’s pennyweight is used.
2.What is pennyweight?
Well, 1 Pennyweight equals 1.555 grams. To get the pennyweight price, you’d have to divide your spot price by 31.1 – this gives you the gram price. Alternatively, you could divide the spot price by 20 for the pennyweights price. You’ll then need to multiply the number obtained with the gold percentage from the value of the scrap gold.
3.Types of Scrap Gold
Besides knowing about the pennyweight and the type of gold called scrap gold, you also need to learn more about the specifics of the scrap gold.
Generally, the used or old gold will come to you in various shapes and sizes, with the most common ones being in the form of watches, gold chains, and other forms of old gold jewelry like brooches, bracelets, rings, pins, engagement, and wedding rings, among other gold pieces that may be bent out of shape. So, you shouldn’t overlook such pieces.
To sell the scrap gold jewelry you have been collecting, you need some sort of license, and the good news is that the license will be in the form of a valid ID, which is needed for record-keeping.
But if you will be buying and trading in scrap gold jewelry, you will be required to apply for a license. The licenses are offered to businesses and individuals.
If you aren’t ready to go through the licensing processes yet, you could opt for a part-time job with other gold buyers or brokers where you can run the business using their licenses.
6.Identify the right tools for measuring gold.
There are a few standard gold measuring tools you’ll need to get into the business. These are the tools that will help you determine the percentage purity of the gold, as well as the value of gold pieces. Fortunately, these specialized tools aren’t expensive. They include:
- Paper money– since the scrap gold business is primarily a cash-only business, you should have a good amount of cash in your pockets.
- Testing kits– to determine the actual karatage or the percentage of the pure gold in the piece.
- A professional scale– get a professional scale to avoid missing out on some vital milligram (happens when you use the digital food scale)
- High-quality magnet– this is for easy detection of actual gold pieces, especially from piles of scrap. Keep in mind that gold doesn’t stick to magnets. If it sticks, it’s a gold plated piece. Also, keep in mind that brass isn’t magnetic.
- Find a fine file– This allows you to identify gold plated pieces because a fine file allows you to see what’s inside the piece.
- A Magnifier Loupe– You need this to see the karat, any hallmark engravings, and scratches. It also helps you inspect what’s under the gold and to find green spots in corroded gold plated items.
Other important considerations are as follows:
- Don’t buy gold jewelry on an impulse.
- Get the piece appraised, especially if the piece is valuable.
- Always know the details of the piece of jewelry you have
- Research and shop around
- Look out for reputable buyers.
- Put in place measures to protect yourself, for example, the authentic documentation for the piece of jewelry, check out, and confirm the company’s policy on reimbursement in case of losses.
- Be realistic in terms of the expected numbers, expect losses, and don’t expect a windfall from one purchase/ sale.
If you have been looking to buy gold jewelry for profit, follow the tips and guidelines above for the best purchase decision.