I HATE getting ripped off and I do not like seeing other people getting ripped of either! The "Cash for Gold" scam gives people a small percentage of what the scrap value of their gold is worth! Look at the following story from the UK's Daily Mail.TV cash-for-gold firms 'offer fraction of true value'
Companies offering cash for gold jewellery in a recent flurry of TV adverts are paying a fraction of the items' true worth.
The firms, which have latched on to increases in the price of gold, are 'shockingly bad value', according to consumer group Which?
Three pieces of new jewellery purchased by Which? for a total of £729 drew offers from the firms of as little as £38.57 for the lot.
One company refused to return a £399 necklace free of charge, as promised, on the inaccurate pretext that it was not gold at all.
The firms sell their services on TV on the basis that customers can post off their old and unwanted jewellery and turn it into cash to pay for a holiday or to clear debts.
The Which? Money magazine picked out three items of jewellery on the high street, a £115 bracelet, £215 bangle and £399 necklace, and purchased four of each. In November 2009 it sent them to four TV gold buyers, as well as getting quotes from three high street pawnbrokers and three jewellers.
CashMyGold offered the lowest prices on all three items, offering just £38.57 in total for the three pieces.
The firm offered just under £10 for the 9ct gold bangle. This compared to a scrap metal price quote of £54 from an independent jeweller. In one instance, Money4Gold told a Which? Money researcher that a 9ct necklace he bought for £399 was 'not gold' and it would cost him £10.95 to have it returned.
The scrap value of a necklace will be considerably less than its price as a piece of jewellery. However, this does not explain the paltry offers.
Companies offering cash for gold jewellery are 'shockingly bad value', according to consumer group Which?
On average, the TV gold buyers offered around 6 per cent of the retail price for gold. High street stores paid around 25 per cent.
The magazine said: 'Companies that encourage people to sell their unwanted gold by post are offering consumers shockingly bad value and should be avoided.'
Postal Gold surprised the researcher by upping its quote when he rejected its cheque - almost doubling its offer for the bracelet and bangle. However, these rates were still far lower than those from jewellers and pawnbrokers.
The firms insist the prices they offer reflect the fact they have different costs to pawnbrokers and jewellers.
CashMyGold's managing director Justin Prichard added: 'Gold retail prices and the prices obtained for smelted gold are not comparable.
'Retail gold can be sold at a marked up price of up to 300 per cent.' He said that for this reason, they advertised only for old or broken jewellery.
HOW THE TV GOLD BUYERS COMPARE
9ct BRACELET 9ct BANGLE 9ct NECKLACE
PURCHASE PRICE £115 £215 £399
WHAT WAS OFFERED:
CashMyGold £6.43 £9.64 £22.50
Postal Gold £7.97 £10.89 £25.04
Money4Gold £8.17 £11.26 (a)
Cash4Gold £10.31 £14.57 £31.48
Pawnbrokers £26.00 £32.00 £80
Jewellers £33.00 £46.00 £102
(a) Firm wrongly claimed item was not gold and demanded £9.95 Postal Order (costing additional £1 Royal Mail charge) to return it. Prices for pawnbrokers and jewellers are an average
GOLD AND PRECIOUS METALS INFORMATION
Gold is one of the most precious metals in the world. It is present in the rivers, seas, and the earth’s crust and trace amounts are present in plants and animals. It is, however, difficult and expensive to extract. In modern mining operations approximately 3 tons of ore are needed to extract one ounce of gold. The many desirable qualities found in gold, along with its scarcity, have made it the most popular metal for use in jewelry today.
Companies offering cash for gold jewellery in a recent flurry of TV adverts are paying a fraction of the items' true worth.
The firms, which have latched on to increases in the price of gold, are 'shockingly bad value', according to consumer group Which?
Three pieces of new jewellery purchased by Which? for a total of £729 drew offers from the firms of as little as £38.57 for the lot.
One company refused to return a £399 necklace free of charge, as promised, on the inaccurate pretext that it was not gold at all.
The firms sell their services on TV on the basis that customers can post off their old and unwanted jewellery and turn it into cash to pay for a holiday or to clear debts.
The Which? Money magazine picked out three items of jewellery on the high street, a £115 bracelet, £215 bangle and £399 necklace, and purchased four of each. In November 2009 it sent them to four TV gold buyers, as well as getting quotes from three high street pawnbrokers and three jewellers.
CashMyGold offered the lowest prices on all three items, offering just £38.57 in total for the three pieces.
The firm offered just under £10 for the 9ct gold bangle. This compared to a scrap metal price quote of £54 from an independent jeweller. In one instance, Money4Gold told a Which? Money researcher that a 9ct necklace he bought for £399 was 'not gold' and it would cost him £10.95 to have it returned.
The scrap value of a necklace will be considerably less than its price as a piece of jewellery. However, this does not explain the paltry offers.
Companies offering cash for gold jewellery are 'shockingly bad value', according to consumer group Which?
On average, the TV gold buyers offered around 6 per cent of the retail price for gold. High street stores paid around 25 per cent.
The magazine said: 'Companies that encourage people to sell their unwanted gold by post are offering consumers shockingly bad value and should be avoided.'
Postal Gold surprised the researcher by upping its quote when he rejected its cheque - almost doubling its offer for the bracelet and bangle. However, these rates were still far lower than those from jewellers and pawnbrokers.
The firms insist the prices they offer reflect the fact they have different costs to pawnbrokers and jewellers.
CashMyGold's managing director Justin Prichard added: 'Gold retail prices and the prices obtained for smelted gold are not comparable.
'Retail gold can be sold at a marked up price of up to 300 per cent.' He said that for this reason, they advertised only for old or broken jewellery.
HOW THE TV GOLD BUYERS COMPARE
9ct BRACELET 9ct BANGLE 9ct NECKLACE
PURCHASE PRICE £115 £215 £399
WHAT WAS OFFERED:
CashMyGold £6.43 £9.64 £22.50
Postal Gold £7.97 £10.89 £25.04
Money4Gold £8.17 £11.26 (a)
Cash4Gold £10.31 £14.57 £31.48
Pawnbrokers £26.00 £32.00 £80
Jewellers £33.00 £46.00 £102
(a) Firm wrongly claimed item was not gold and demanded £9.95 Postal Order (costing additional £1 Royal Mail charge) to return it. Prices for pawnbrokers and jewellers are an average
GOLD AND PRECIOUS METALS INFORMATION
Gold is one of the most precious metals in the world. It is present in the rivers, seas, and the earth’s crust and trace amounts are present in plants and animals. It is, however, difficult and expensive to extract. In modern mining operations approximately 3 tons of ore are needed to extract one ounce of gold. The many desirable qualities found in gold, along with its scarcity, have made it the most popular metal for use in jewelry today.
PROPERTIES OF GOLD
Gold in its pure state:
Has a melting point of 1945 degrees Fahrenheit (1063 degrees Celsius). When alloyed (chemically combined) with other base metals the melting temperature of the resulting alloy is changed. 18K yellow gold has a melting point of 1675 degrees Fahrenheit and 14K yellow gold has a melting point of about 1550 degrees Fahrenheit.
Has a specific gravity of 19.33. It is relatively heavy compared to most metals, such as silver (SG 10.7) or iron (SG 7.8). A notable exception is platinum (SG 21.4).
Is more malleable than any other metal and can be hammered into foil so thin that it is almost transparent.
Has a unique ductility property allowing it to be drawn into wire so fine it can barely be seen.
Is deep yellow in color. Its great reflectivity properties help keep its brightness and color from fading with time.
Will not rust, tarnish or corrode. Gold jewelry recovered from ancient Egyptian tombs is in the same state as when placed there over 4000 years ago.
Is softer than most other metals. On the Mohs scale of hardness (which is a measure of a gemstone or mineral’s resistance to scratching), gold has a hardness value of 2 to 2.5. Diamond has a value of 10. Pure gold may easily be scratched. Fortunately, gold becomes harder when alloyed with other base metals.
Is relatively scarce and therefore expensive. It is estimated that only 125,000 tons of gold have been mined the world over since the beginning of time.
Is able to bond with other base metals. This property gives rise to the many different colors available in modern gold alloys.
FINENESS (KARAT VALUE)
Since ancient times the purity of gold has been defined by the term karat, which is 1/24 part of pure gold by weight. Pure gold is equivalent to 24K. Gold purity may also be described by its fineness, which is the amount of pure gold in parts per 1000. For example, a gold ring containing 583 fine gold has 583 parts (58.3%) gold and 417 parts (41.7%) of other base metals.
Federal Trade Commission rules require that all jewelry items sold in the United States as gold shall be described by "a correct designation of the karat fineness of the alloy." No jewelry item less than 10K may be sold in the United States as gold jewelry.
Karat Value Definitions:
Karat System: A system of measurement based on 24 karats being "fine" or "pure" gold. 1 karat equals 1/24th fine gold by weight. This is the system used in the United States.
Plumb Gold: Karat weights are usually determined with a small, fractional variance allowed. Karat gold which has no variance and is exactly the precise fractional karat weight is called "plumb" gold.
European System: A system of measurement based on a fraction of 1,000; or the number of grams of gold in 1 kilogram of alloy.
The following table lists the relationship between different international gold markings.
GOLD KARAT INFORMATION CHART
Karat Gold
Parts Gold
Percentage Gold
Normal European Stamping
9 kt 9 in 24 37.50% 375
10 kt 10 in 24 41.67%416
12 kt 12 in 24 50% 500 14 kt 14 in 24 58.33% 583 or 585
18 kt 18 in 24 75% 750
22 kt 22 in 24 91.67%917
24 kt 24 in 24 99.99%999 or .99999
Gold in its pure state:
Has a melting point of 1945 degrees Fahrenheit (1063 degrees Celsius). When alloyed (chemically combined) with other base metals the melting temperature of the resulting alloy is changed. 18K yellow gold has a melting point of 1675 degrees Fahrenheit and 14K yellow gold has a melting point of about 1550 degrees Fahrenheit.
Has a specific gravity of 19.33. It is relatively heavy compared to most metals, such as silver (SG 10.7) or iron (SG 7.8). A notable exception is platinum (SG 21.4).
Is more malleable than any other metal and can be hammered into foil so thin that it is almost transparent.
Has a unique ductility property allowing it to be drawn into wire so fine it can barely be seen.
Is deep yellow in color. Its great reflectivity properties help keep its brightness and color from fading with time.
Will not rust, tarnish or corrode. Gold jewelry recovered from ancient Egyptian tombs is in the same state as when placed there over 4000 years ago.
Is softer than most other metals. On the Mohs scale of hardness (which is a measure of a gemstone or mineral’s resistance to scratching), gold has a hardness value of 2 to 2.5. Diamond has a value of 10. Pure gold may easily be scratched. Fortunately, gold becomes harder when alloyed with other base metals.
Is relatively scarce and therefore expensive. It is estimated that only 125,000 tons of gold have been mined the world over since the beginning of time.
Is able to bond with other base metals. This property gives rise to the many different colors available in modern gold alloys.
FINENESS (KARAT VALUE)
Since ancient times the purity of gold has been defined by the term karat, which is 1/24 part of pure gold by weight. Pure gold is equivalent to 24K. Gold purity may also be described by its fineness, which is the amount of pure gold in parts per 1000. For example, a gold ring containing 583 fine gold has 583 parts (58.3%) gold and 417 parts (41.7%) of other base metals.
Federal Trade Commission rules require that all jewelry items sold in the United States as gold shall be described by "a correct designation of the karat fineness of the alloy." No jewelry item less than 10K may be sold in the United States as gold jewelry.
Karat Value Definitions:
Karat System: A system of measurement based on 24 karats being "fine" or "pure" gold. 1 karat equals 1/24th fine gold by weight. This is the system used in the United States.
Plumb Gold: Karat weights are usually determined with a small, fractional variance allowed. Karat gold which has no variance and is exactly the precise fractional karat weight is called "plumb" gold.
European System: A system of measurement based on a fraction of 1,000; or the number of grams of gold in 1 kilogram of alloy.
The following table lists the relationship between different international gold markings.
GOLD KARAT INFORMATION CHART
Karat Gold
Parts Gold
Percentage Gold
Normal European Stamping
9 kt 9 in 24 37.50% 375
10 kt 10 in 24 41.67%416
12 kt 12 in 24 50% 500 14 kt 14 in 24 58.33% 583 or 585
18 kt 18 in 24 75% 750
22 kt 22 in 24 91.67%917
24 kt 24 in 24 99.99%999 or .99999
WEIGHING PRECIOUS METALS
The weight of a piece of gold jewelry is a factor that helps to determine its value. It is important because it is an indication of the amount of fine gold in an item of jewelry. Grams (g) and pennyweights (dwt) are the units of weight most commonly used in weighing gold. Gold and silver are almost always weighted in the troy system of weights where one pound troy equals twelve troy ounces and twenty pennyweights equals one troy ounce. The Avoirdupois weight system, where one pound equals 16 ounces, is used in the United States for most everything except precious metals. The following table summarizes useful weight conversions.
WEIGHT CONVERSION TABLE
The weight of a piece of gold jewelry is a factor that helps to determine its value. It is important because it is an indication of the amount of fine gold in an item of jewelry. Grams (g) and pennyweights (dwt) are the units of weight most commonly used in weighing gold. Gold and silver are almost always weighted in the troy system of weights where one pound troy equals twelve troy ounces and twenty pennyweights equals one troy ounce. The Avoirdupois weight system, where one pound equals 16 ounces, is used in the United States for most everything except precious metals. The following table summarizes useful weight conversions.
WEIGHT CONVERSION TABLE
1 gram (g) = 0.643 dwt = 0.0032 oz t = 0.035 oz av
1 pennyweight (dwt) = 1.555 g = 0.05 oz t = 0.055 oz av
1 troy ounce (oz t) = 31.103 g = 20 dwt = 1.097 oz av
1 ounce avoirdupois (oz av) = 28.3495 g = 18.229 dwt = 0.911 oz t
A good formula to follow is the weight in grams for your gold, the karat value of the metal(percentage of Gold) and the Spot Price of one ounce of pure Gold. Today's spot price for a troy ounce of pure Gold is $1,095.
So if you you have a piece of 10 karat jewelry, that weighs 16.5 grams
the actual value of the gold based on today's closing price of $1095.
1) Solve for the amount of pure gold in the 16.5 gram piece of 10 karat gold.
16.5 gram x 41.67%(amount of pure Gold in 10 karat jewelry)= 6.87555 grams of pure Gold.
2) Solve for the price of one gram of pure gold based on todays' spot price. Troy ounce=31.103 grams. Today's spot price for gold, $1095 for one troy ounce. Divide $1095 by 31.103=$35.21 a gram of pure Gold.
3) Now arrive at the TRUE value of the Gold in this example.
6.87555 grams pure Gold x spot price of $35.21 a gram and you arrive at the answer = $242.08811 for the Gold.
Now you have the TRUE VALUE OF THE GOLD, based on
weight of pure gold at todays spot price.
Now, if you go to a pawnbroker, they will likely want to give you 35-50% of the actual value of the Gold because many of them got burned real bad in the early 80's when the Hunt Brothers from Texas tried to corner the Silver market. Prices of silver and Gold went sky high, but then the bottom dropped out of the markets and people panicked selling their precious metal for whatever price they could get, just like what will happen when this Bull market in precious metals ends.
SO FORGET ABOUT THE GOLD BUYING PARTIES, THE SECURE MAILERS TO SOME DISTANT LOCATION..., GO TO A REPUTABLE COIN DEALER OR JWELRY SHOP, THEY SHOULD GIVE YOU THE SPOT VALUE OF THE PURE GOLD IN YOUR PIECE BASED ON WEIGHT MINUS A SMALL COMMISSION OF 3-5%. BE PREPARED TO TURN THE OFFER DOWN IF YOU ARE LOWBALLED OR IF THE COMMISSION IS EXCESSIVE (MORE THAN 5%). THE MORE DESPERATE YOU ARE, THE LESS LIKELY IT IS, THAT, YOU'LL GET A FAIR DEAL. SOME OF THE OPERATORS ARE REAL SHYLOCKS SO, BE CAREFUL!
Although I warned my mother not to send her gold to the "cash4gold" add that was on tv, she insisted and I went through it before she sent it out and noted several gold necklaces clearly marked at 18 karat gold and there were other items marked as well. When she finally got her check it was for $13.82 and the day we received the check in the mail was exactly 10 days after the date posted on the check and therefore the "cash4gold" folks wouldn't accept it back.
ReplyDeleteA hard lesson learned by my elderly mother and I really wish there was something that law enforcement or the government could do to shut these scams down.