April 21, 2011 -- Gold prices are so high now—over $1,500 an ounce—that consumers are cashing in anything they've got that has gold in it, including teeth, bridges, crowns and other dental work.
"I've seen them pop the gold right out of their mouth," says Dave Crume, president of the National Pawnbrokers Association and executive vice president of Wichita, Kansas, pawnbroker A-OK Enterprises.
"It's a little awkward," he admits, "but I've see them take out a tooth." More often they bring in family heirlooms they don't want or jewelry they no longer wear. The gold-selling trend, which started picking up steam two years ago, has become only stronger now, as new ways have arisen for customers to unload their gold. It can be sold via mail, the Internet and Tupperware-like "gold parties," such as Premier Gold Parties, where a group of friends meet to sell their gold in a home setting.
In Texas, a seller can pick up dinner and sell her tiara at the same time: most of the 50 locations of Gold & Silver Buyers, the state's biggest precious metals buyer, are inside or alongside supermarkets. So great is the volume of their business that they do their own smelting—an added efficiency that translates, according to president Larry Gray, into better prices paid to customers. Items sold have included a platinum surgical implant, discovered in the cremated remains of a loved one.
Nationwide, the incentive to sell is strong: The U.S. economy remains soft; unemployment remains high. Even people not in need of extra money, says Crume, are selling now to avoid missing what they perceive may be the market's top.
Prices paid for gold jewelry vary widely. "They're all over the board," says Crume. "One place will pay you $100 for what you've got; another will pay $1,000." But in the past three months, says Crume, prices have begun to converge. "It's true whether you're selling to jewelry store or to a pawnbroker," he says. "The market's getting more competitive--a benefit to the consumer." In the past sellers were getting "maybe half the market price for scrap gold. Now they're getting more like 70 or 80 percent."
No matter to whom you sell, experts say you should be careful. Recent months have seen an uptick in gold-related fraud and an influx to the market of transient dealers whom Crume and others call "rogue buyers." They blow into a town, run big ads offering high prices, and set up shop, say, in a hotel ballroom. After scooping up sellers' jewelry and coins, they disappear, leaving their victims un- or underpaid. Before you sell to anybody, check with the Better Business Bureau to see if there are complaints against your buyer. The BBB reports, for example, that a leading online buyer based in Florida racked up 339 complaints in the last 36 months.
Sell Gold HQ, a web service that reviews and compares online gold buyers, says in a statement: "We find consumers tend not to realize that the gold scrap value they will be offered is often a tiny fraction of the retail price they originally paid. Even when consumers use a legitimate site that buys gold online, it is easy to make a costly mistake by not reading the fine print. For example, some websites offer free shipping to send in gold, but very high shipping rates if the consumer declines the offer and asks for the gold to be returned."
If you decide to do business with a distant buyer who operates by mail or via the Internet, it's smart to take your item first to a local jeweler or pawn shop and ask them to estimate its value. That way, you'll have something to compare to whatever the out-of-town buyer offers. Don't worry that you're abusing the good nature of your local businesses, says Crume. "Go to three or four stores," he advises, "and compare." You can use the National Pawnbrokers Association website to locate the nearest broker.
While the accuracy of scales used by jewelers and pawnshops typically is verified and re-checked periodically by the local department of weights and measures, the same may not hold true for scales used by transient buyers or for house-party situations. With the price of gold so high, the difference of a few grams can mean a difference of several hundreds of dollars.
Before you part with your gold for its scrap value, make sure it's not worth more in its present form. "There's a big market in estate jewelry," counsels Crume. Older jewelry often represents better quality than what's available at the same price today.
Consumers are selling silver, too. Crume says he's seen a lot of silver turn up in just the past 30 to 60 days. "In the '60s and the '70s," he says, "People bought bags of silver dollars." Prices plunged. "All this time, those people have been sitting on those dollars. Now we're selling them. The owners know they're as close right now to recouping their investment as they're ever likely to get." Silver now is trading for $45 an ounce. "A year ago," says Crume, "It was In the low 20s. That's a 100 percent increase." He's starting to see not just coins but silverware and table settings.
Brian Witherell, operations manager of Sacramento antiques dealer Witherell's, says, "If you've got a silver flatware service, it's worth twice what it was six months ago. In just the last three months, silver has gone from $30 an ounce to $45."
Witherell, like Crume, recommends you think twice about selling for scrap value an object that may be worth more intact, because of its artistic merit or historical significance. He cites as an example a watch fob made in the shape of a railroad spike. It was fashioned out of gold left over from the making the full-sized golden spike used in 1869 to commemorate completion of the transcontinental railroad.
"It was a little thing hardly an inch long," he says, "so its gold value wasn't very great." It sold at auction for $20,000.