Fast Money: With Gold Prices Dropping, Here's How to Sell Your Jewelry for Top Dollar

Gold compass on pile of US money

For years, gold prices have been breaking records, as investors have eagerly snatched up the yellow metal to hedge against inflation. But on Wednesday, prices dipped as Fed Chairman Ben Bernanke testified that the economy may be recovering -- and investors may not want to park their money in precious metals any longer.

Even at a few hundred dollars off 2011's historic peak, gold prices are still high. But with Bernanke's announcement suggesting that there are more lucrative areas for investment, it's anyone's guess how long it will be before the gold bubble bursts. So if you're hoping to use the recessionary gold rush as an opportunity to get rid of some of your old jewelry, you may be running out of time.

Not surprisingly, as people have scurried to sell their gold over the past few years, numerous companies (and even countries) have tried to cash in. Unfortunately, not all gold mongers have a great reputation -- and some of the most convenient may also be the least scrupulous. So before you rush to sell your family heirlooms, here are a few things you need to know.

How Gold Sales Work

When selling your gold, the first thing to consider is the difference between its retail price and its melt value. Retail price is the cost of the bauble if you were purchasing it in a store; in all likelihood, you will only get offered a fraction of this amount.

Melt value, sometimes called "scrap value," is the commoditized value of the gold itself. If you have an heirloom Rolex, its melt value is probably far less than the retail price; not so for Aunt Mildred's horrendously tacky ring that you dug out from bottom of your jewelry box.

Gold dealers measure scrap gold, like Aunt Millie's ring, in pennyweights. Each pennyweight is 1.55 grams, and a reputable dealer will be able to tell you how much they will pay for a pennyweight of 10k, 12k, 14k, 18k or 24k gold. Using a scale and calculator -- or this handy iPhone app -- you could easily figure out how much the dealer should be paying you. Of course, if Millie's ring is attractive, the work of a famous designer, or has some other qualifying factor, your gold dealer may be willing to offer a fair bit more than the melt value.

Cash 4 Gold

Despite going bankrupt last year, Cash4Gold still seems to be doing business on the Internet. One of the biggest companies to cash in on the new gold rush, its key selling point is convenience: all you have to do is call the Florida-based company or go to their website, request a "Refiner's Return Pack," put your gold items inside, and drop it in the mail. Cash 4 Gold then appraises your jewelry and sends you a check. Unlike jewelry stores or pawn shops, you don't have to do research, make arrangements on the phone, or drive around town. The entire transaction happens without any face-to-face interaction, and you never have to leave the comfort of your home.

In this case, though, convenience comes with a high price. At the height of its popularity, Cash4Gold was vilified for lowballing its customers, and sending checks for -- at most -- a third of the actual melt value. Regarding the allegations against the company, a Cash4Gold spokesman replied that "Cash4Gold has done nearly 1 million transactions so the 57 complaints about us represent a minuscule fraction of complaints from our customers ... Cash4Gold is a great option for customers seeking a fast, secure, simple, convenient and discreet transaction."

Controversy aside, there are far better -- if more complicated -- ways to cash in on your old jewelry.

Pawn Shops, Jewelry Stores, and Gold Parties

Pawn shops have a bad reputation as the last stop for desperate people, but they may also be one of the best places to sell your gold. In numerous comparative showdowns, pawn shops consistently emerged as one of the best places to sell precious metals. An important consideration, however, is the fact that pawn shops are a business and will try to give you as little money as possible. If you seem desperate, are in a hurry, or take their first offer, chances are that you'll get less money than you may have hoped.

The first way to maximize your pawnshop payout is by doing a little research. To get a feel for the market value of your jewelry, check online sales of similar pieces. Based on a few comparative searches, you can probably get an idea of what your piece is selling for -- and if its retail price is higher than the melt value.

While you're at it, you should also get a second (and a third, and a fourth...) opinion from other pawn shops and jewelry stores. Keep in mind, though, that even the best store will still offer you a price well below retail value. The same goes for gold parties, which have come under attack for giving participants a fraction of the melt value of their gold.

Auctions and Online Sales

If you have the time and patience, the best way to sell your gold is probably through an online sale or auction. By observing comparable auctions on eBay, you can get a good idea of how much your jewelry is worth, as well as the best way to sell it. Unfortunately, this method is also time- and work-intensive: in addition to your research, you'll need to take photos of your trinkets and set up the auction itself. If you don't have a Paypal account, you'll have to open one, as most auctions are completed through Paypal; in fact, eBay requires Paypal for many auctions.

Even if you run an online auction, you may still find that you can't get the full value for your jewelry, especially if you're charging more than a few hundred dollars. On eBay, private sellers tend to be crowded out by professional online stores, and unless you're willing to pay premium prices for prominent listings, it's easy to get swallowed up by the competition.

As the old saying goes, time is money, and the time you spend on setting up an auction for your old trinkets may not end up being worth it. The big question to consider is how much your jewelry is worth to you and how much time you're willing to spend selling it.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at, or follow him on Twitter at @bruce1971.

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This is a wealth of terrific advice on selling gold jewelry and gold in general. Everyone looking to buy or sell gold should read through this information. Thanks for sharing the best advice on selling gold for the best prices.

February 03 2015 at 9:20 PM Report abuse +1 rate up rate down Reply
Victoria Mendez

there will always be an increase as well an decrease fall on certain items. nothing will ever stay at equilibrium. you just have to be on the look when and at what certain time is best to sell your valuables at the best prices.

August 20 2013 at 5:40 PM Report abuse rate up rate down Reply
Bo Huggabee

of course gold prices are dropping, and money is inflating, it is the fall of america you ******* morons, quit falling for articles like these...

June 18 2013 at 1:33 PM Report abuse rate up rate down Reply
Martin Vlček

The drop may continue, but in the long term, I believe gold will at least keep up with inflation. This is a very good long-term perspective on the price of gold:

April 15 2013 at 2:03 PM Report abuse rate up rate down Reply
1 reply to Martin Vlček's comment
Bo Huggabee

your an idiot, with inflation gold becomes more valuable meaning you get more dollars per weight of gold. yet the dollar is becoming weaker and gold isn't bringing in as much cash? our country is ****** and we are being giving the middle finger.

June 18 2013 at 1:35 PM Report abuse rate up rate down Reply

As long as they keep printing the dollar. It will be devalued. That will make gold and any commodity will be worth more.
This a ploy to sell bonds and cover the fiat currency. The USA has beeen sending gold back to the countries that own it. They too want to keep their gold in their posession. China, India and Russia are buying gold.

March 01 2013 at 4:59 AM Report abuse rate up rate down Reply

To some one that don't own any gold,let it drop, these gold companies have gotten rich, by selling gold $1500 to $2000, they are the real villians,never heard any thing about selling at $10 oz,no money to be made at that price.They are all weasels.

February 28 2013 at 6:03 PM Report abuse -1 rate up rate down Reply

it will all depend on a gdp of at least 3%..then gold will fall back to 1000 or less.. gold falling is actually a good sign for the economy...

February 28 2013 at 5:30 PM Report abuse +1 rate up rate down Reply
In My Opinion Only

Time for the "Gold Rush" TV show to lower their expecations. Last season, all hard labor money's gone and spent on their bills. The only way they kept on going was being bribed by the reality TV show.

February 28 2013 at 4:52 PM Report abuse rate up rate down Reply

The stock market will always be better than gold. Just don't buy what a stock broker or "firm" advises. Buy the best companies that dominate their industries and you'll do fine in the long run. Don't let gold be more than 5% of your net worth. All it is--is an insurance policy against inflation---not an investment. If you buy gold then buy physical bullion or gold US coins from a reputable dealer. Like Lake Worth Gold Mine in Lake Worth Florida. Before you go to a refiner know this: they may only deal with dealers; they may require a minimum; they will definitely assess the purity of your gold whether it is 10, 14, 18, or 24, and dilute your pay before they take their fees.

February 28 2013 at 3:01 PM Report abuse rate up rate down Reply
1 reply to ytclevin's comment

Stock market is ALWAYS better than gold?? Gold went from $260 an ounce in 2001 to over $1900 an ounce in 2012. Very few stocks can claim that run up from 2001 to 2012 . By the way silver went from $3 an ounce to over $40 in that same time. So glad I bought it up in 2001.

February 28 2013 at 10:03 PM Report abuse +1 rate up rate down Reply

From their mouths to Gods ears..................please please let it go down so that I can inhance my position

February 28 2013 at 1:56 PM Report abuse rate up rate down Reply