Trading in gold bullion or coins can be a risky proposition if you don't trust the people you deal with. If you have plans to buy and sell a significant volume of gold, or have plans for many smaller exchanges, make sure you know as much as you can about the people you're dealing with. There are some simple ways to determine if the gold dealer you're working with is reputable, allowing you to buy and sell with the confidence that comes from knowing just what you're getting.
Testing the Waters
When engaging in a potentially high dollar exchange with anyone, it's best to go into your initial transaction knowing the precise value of the item changing hands. This goes both for selling gold and buying it, so do your homework in advance and make it clear that you plan to conduct many future transactions. This is just as important for scrap gold as it is for pieces with inherent value beyond their melt price. How you're dealt with during small transactions is often indicative of how larger value exchanges will go.
When selling, expect to lose between 10 and 30 percent of the gold's melt value to mark-downs, often so the gold trader can turn a profit on each transaction. Lower mark downs are usually a sign that the individual in question buys and sells a sizable quantity of gold on a regular basis. When buying, expect the mark-up to match the mark-down, as any good business person will turn a profit on both ends of the exchange.
Know Your Merchandise
This is especially important if the item in question is worth a lot to collectors or other interested parties. Don't accept melt-value prices for any currency pieces or old jewelry. These usually have value far beyond their gold content, even if the total gold weight is relatively low. More important is knowing what you're buying in advance, so you're able to spot potential flaws or imperfections that might alter an item's total value.
For more common pieces, make sure you have an accurate metric scale at home with a digital read-out so you can find the precise weight of a necklace or ring ahead of time. Selling gold by the gram will help you ensure an accurate final value and simplify any math that might be required to find the value of items with lower gold content, such as 14 and 18 karat gold jewelry.
Whether it came from a yard sale, an auction or your grandfather's coin collection, if you choose to sell it, you'd best make certain you get the best price for the gold you sell. Likewise, make sure you're paying a fair value for those items you choose to purchase. The best way to ensure both of these are as easy as possible is to build a relationship with a local gold trader like Rocky Mountain Gold & Silver Exchange, so you and he can conduct transactions in complete confidence.