It's no surprise that you didn't get as much money as you expected when you sold your gold. I'm sorry you were disappointed.
We buy gold jewelry at retail and the markup is substantial. When we sell we are getting a price for the raw value of the gold (wholesale), that doesn't include what we paid for design, manufacturing, advertising, distribution, and profit when we bought the item. Also, the current price of gold often quoted is for pure 24K gold. The jewelry we buy is mainly 14K gold.
So let's do some arithmetic. 14K is 14 out of 24 parts gold. That's about 58%. So right off the bat, the gold jewelry when sold for scrap is only worth 58% of what 24K gold is selling for on the world market. Now we have to factor in the processing fees/profits for the person buying the gold. So that's another few %. And to start out with, we paid for a finished product, not for raw gold. When we sell the item for scrap, all the money we paid up front for design, manufacturing, etc isn't considered of any value anymore.
Also remember, the price quoted as the value of an ounce of gold is for a troy ounce of the 24K gold. A troy ounce is 31.1 grams ( or 20 penny weights ). Most jewelry is a lot less than that in weight. So again, you have to figure the value of the gold for the amount of gold you actually have in your jewelry.
The only way to get more out of a resale is to sell the item as a piece of jewelry, in a private sale, not for gold scrap. And it's very hard to find someone who is willing to buy most gold jewelry for anything more than scrap value. Gold has to go up 3 or 4 times what it was when you bought an item before you will get your money out when you resell it for scrap.
Are we overpaying for the gold we are buying today? That is an interesting question. If an item contains 6 grams of 14K gold, and a troy ounce of 24K is selling for $1700, how much is too much to pay for that jewelry purchase? The gold content of the 6 grams of 14K is only $191. That's for the raw gold.... it still needs to be processed into an alloy and the jewelry designed, manufactured, and distributed. And then each company in the chain needs to make some profit. So, how much is fair to pay for that piece of jewelry? How beautiful is it? How much do you love and want it?
I think that for most things we buy, the value of the components are a small percentage of the price we pay for the finished goods. And most of the items have little resale value.
Last edited on 9/19/2012
Last edited on 9/19/2012