With the price of gold having increased dramatically over the last 5 years, the cost of wedding rings has risen in direct proportion. Because of this more and more people are turning to Scrap Gold companies to not just offset the cost of this, but also to generate additional funds to put towards their special day.
Matt from leading postal gold company Hatton Garden Metals (winner of best postal gold company in an undercover investigation in 2010 by Martin Lewis moneysavingexpert.com) provides some useful advice on the best practice to follow when selling your old jewellery as scrap, and also how to avoid some of the common pitfalls.
The key to ensuring you get the best deal possible when selling your old gold jewellery is to know your jewellery and to do your research. Below are a few simple things to consider that will give you the information you need to make an informed decision no matter where you sell your gold.
- Know Your Jewellery
The value of your jewellery will be based on two things. Firstly, the carat value and secondly, the weight. To understand the valuation of the gold content it is important that you know have both these pieces of information. You can determine the weight using a reliable set of scales, and the carat value can be determined from the hallmark that corresponds to the table below. If the item does not carry an approved UK hallmark then there is no guarantee that the quality of the item is as per any markings on the gold. It is quite common for gold that has been imported from Asia to carry a 22ct marking (not a UK Hallmark) although the true quality of the gold will be somewhere between 20 – 22ct.
2. Know the Market Value for gold
The market value of gold is fixed twice daily by the ‘London Bullion Market Association’ commonly referred to as the LBMA. This fix is for the value of one troy ounce (or roughly 31.1 grams) of 24ct gold. To give yourself a base price to work out the value of your jewellery we are going to calculate the market value of 1gram of 1ct of gold.
At the time of writing the Gold Fix stands at £868.68. To calculate the price of a single gram we divide this by 31.1 and then again by 24 to get the final figure of £1.16 for 1 gram of 1ct gold. If you have 120 grams of 9ct gold to sell you would simply perform the following equation
£1.16 x 120 (weight in grams) x 9 (carat value) = £1252.80
This figure is of course the market value of pure gold in bullion format so, only reflects the market value of the gold, not the price that you will achieve for your jewellery
3. Know the rate you are being offered
In February 2011 the Office of Fair Trading took enforcement action against 5 companies after a number of complaints were lodged against these companies in relation to their gold buying business practices. One of the key undertakings that were subsequently enforced was that the 5 companies must ‘provide consumers with clear information on the prices offered for gold, including information on the weight and carat of the items assessed’. However these undertakings only apply to the 5 companies in question and there are others in the industry that still keep their prices hidden until they have received your gold. Whether you are selling to a Postal Company, a High Street Jeweller or a Pawnbroker, always make sure you understand the rate you are being paid before parting with your gold. If a company refuses to disclose this then I would always recommend you walk away. At Hatton Garden Metals we have committed to always paying at least 95% of the market value, and in fact we currently pay a slightly higher rate. We also provide a simple calculator that can be used to assess the prices that we pay linked to the market value of gold updated daily.
4. What else should I consider?
I would recommend using Royal Mail’s Special delivery service. Their record at delivering next day with insured carriage up to £2,500 on request is excellent. Always make sure the insurance level covers the market value of your gold.
Non Gold Items
The valuation and subsequent payment for your gold will only be based on the total gold content. If non gold items exist within the jewellery such as stones, springs, watch movements or steel inserts the weight of these would be deducted from your items before the value calculated. Stones are normally lost in the melting process so if they are of any value to you either remove them before sending your gold or check with your dealer to see what their policy is in relation to the removal and return of the stones or other elements.
If for whatever reason your dealer and your valuations are different you may wish to have your gold returned to you and cancel the deal. Good practice here is for positive confirmation of acceptance of the new valuation to be given by the seller, although a number of companies will assume agreement if you do not respond to their request in a certain time. It has also been known for some companies to take excessive time to send back your gold in an attempt to dissuade you from having it return. Check with the dealer before sending what there policy is in relation to returns and if this policy is not stated on their website then get it in writing.
There are a large number of consumer websites, forums and blogs upon which consumers from all industries freely share their experience when transacting with organisations. The postal gold industry is no different. I would always recommend to only use a Gold dealer that has independent unmoderated testimonials that cannot be edited by the companies in question. If not I would be compelled to ask them what they have to hide.
|Matt is a Director of Hatton Garden Metals and can be contacted for further information at firstname.lastname@example.org or via the Hatton Garden Metals Website
Hatton Garden Metals are also proud to sponsor the Campaign for Fair Postal Gold