Why Scrap Gold Is a Valuable Commodity
- It is very difficult to find any nation in world history that has not found value in gold. The earliest cultures found physical beauty in the metal and, as a result, gold evolved to have monetary value. Because of this value, nations have gone to war over gold, colonized continents over gold and, like the case of the United States and other countries, based the value of their paper currency on gold. This was called the gold standard until it was later phased out in The United States and other countries. Gold was a source of great value since it was first discovered and remains a great source of value even today.
- Gold has a relatively simple valuation standard as compared to other items such as diamonds. Gold is measured using the carat system. 24-carat gold is the purest form of gold but is considered too soft for most uses. 22-carat gold is often the purest form of gold used in jewelry. Lower-carat ratings are found in lesser quality jewelry, low-cost gold coins, and numerous industrial uses like electronics.
- Most of us know that gold is very valuable but we fail to realize that the gold in our unused or broken jewelry is just as valuable. If you were to sell your scrap gold, the company who ultimately purchases it will melt it down. Your jewelry or other item will become a block of gold after being mixed with other people's scrap gold and later, rated for purity. The price you receive will be much less than the price of gold on the open market. The price varies by company but you will find that the easier it is for you to sell it, the lower the profit you receive. For example, if you can put it in a postage paid envelope and later get a check in the mail, you will not receive as much as if you spent some time showing it to local dealers.
- There is no absence of companies wanting to purchase your scrap gold. These companies will often offer you a price that is much lower than the true value of your gold and then sell it to a refiner for a profit. The refiner will charge the seller a refining fee and an appraisal fee which is passed on to you, the seller. The refiner will later sell it to a company that will use it for the appropriate application based on its purity. If it is low carat gold, it may go to an electronics manufacturer, while higher quality may go to a jewelry manufacturer.
- When you see commercials offering cash for gold and later read stories of frauds committed by some of these companies, it is easy to believe that anybody who purchases gold and offers you a price much lower than its true worth is committing fraud. While it may be true, you will never receive the true value for your gold. You are paying these companies to take your gold and find a buyer. By receiving less money than your gold is worth, you are paying the company to find a buyer for you.
