10 Tips For Selling Your Gold for Cash

Aug. 23, 2011 -- In today's swerving economy, stocks are out, and gold is in.

The price of gold is up 20 percent since the beginning of 2011, and by mid-August gold was going for over $1,700 per ounce. At times on Monday, its spot price hovered near $1,900 per ounce.

So how do you cash in?

If you're like thousands of Americans, you go to a gold party, the hottest trend on the block, where you can have your jewelry appraised and get paid cash on the spot.

But not so fast.

With every good deal comes a case of buyer's and, in this case, seller's beware, a reminder that consumers should do their homework before selling their jewelry at gold parties or in a local jewelry store.

The Better Business Bureau (BBB) advises consumers that while gold parties may be a fun and convenient way to make some cash, they may not provide you the best deal.

Follow these tips from BBB to make sure you're getting the best value for your gold.

The weight of gold helps determine its value, but keep in mind that jewelers use a different measurement standard called a Troy ounce. U.S. scales will measure 28 grams per ounce, while gold is measured at 31.1 grams per Troy ounce. Some dealers may also use a system of weights called pennyweight (dwt) to measure a Troy ounce, while others will use grams. A pennyweight is the equivalent of 1.555 grams. Be alert that a dealer does not weigh your gold by pennyweight but pay you by the gram, a sneaky way for the dealer to pay you less for more weight of gold.

2: Know Your Karatstext:Pure gold is too soft to be practically used so it is combined with other metals to create durability and color. The Federal Trade Commission (FTC) requires that all jewelry sold in the U.S. describe a karat fineness of the alloy. One karat equals 1/24 of pure gold by weight. So 14 karats would mean the jewelry was 14 parts gold and 10 parts other metals. It is illegal for jewelry to be labeled "gold jewelry" if it is less than 10 karats. It is important to know the karats of your gold to make an informed decision on the scrap value of your jewelry.