Gold is near an all-time high. Here's how to sell it without getting scammed.
Investors seeking refuge from inflation are again embracing gold, as often happens when the stock market turns stormy. But with prices of the shiny metal now near an all-time high, some people may be tempted to sell and lock in a profit.
The spot price for gold is about $1,958 an ounce, according to financial data provider FactSet. That's about 11% higher than a year ago and 62% higher than five years ago.
Buying gold might be the easiest part of investing in the metal — after all, buyers can purchase 1-ounce bars from the likes of Costco or through a number of online gold sellers. Others may end up with gold through inheritance, with coins, bars or jewelry passed on by relatives.
But selling your gold has potential pitfalls, such as failing to secure a decent price or even getting scammed, experts say.
"Selling can be expensive," noted Kathy Kristof, a personal finance expert and the founder of Sidehusl.com, a site about making money on the side. "It's like exchanging currency — you buy at one price and sell at another — so you have to be careful where you sell your gold."
See Managing Your Money for more on buying gold:
- Are 1-gram gold bars worth buying?
- Where to buy gold bars and coins online
- Buying gold bars and coins online? Avoid these mistakes
In other words, even though you bought that 1-ounce gold bar from Costco for $1,999, you might not be able to get the same price when you sell it. The key is aiming to get a price that's as close to the current spot price as possible, Kristof said.
Research, research, research
It's essential to do your research before you sell your gold to a third-party company. Brick-and-mortar buyers might not be able to provide as high a price as online buyers because they incur more costs, such as maintaining a storefront. Two online gold buyers that Sidehusl has researched and recommends to people seeking to sell their gold are The Alloy Market and Express Gold Cash, Kristof said.
"Alloy and Express Gold Cash are giving you close to the spot price," she said.
In doing your research, she recommends sifting through reviews to look for red flags, such as complaints from dissatisfied customers, lawsuits or even cases where a company claims the gold never arrived.
"That is a really important thing to do if you are using someone you don't know well," she noted.
Check reviews on Yelp, Trust Pilot and the Better Business Bureau to screen for problems. Also carefully read through the terms and conditions before sending your gold to a company, because some services state that they aren't responsible if items are lost after you ship them, Kristof said.
"Red flags are when there are complaints about them not receiving the gold or not giving the appropriate value for the gold content," she noted.
Set your expectations
Generally, gold buyers like Alloy Market and Express Gold Cash will buy gold in multiple forms, from old dental crowns to jewelry to gold coins.
But not all gold is created equal. For instance, some jewelry might be 18-karat gold, which means it's only 75% pure gold, with 25% alloy content. In that case, the price you'll fetch for that 18-karat jewelry won't be as high as for 24-karat pieces.
Some jewelry might command higher prices if you sell it to a jeweler or other purchaser who is interested in the item for its aesthetics, rather than the gold content alone, Kristof noted.
Insurance coverage
If you plan to sell through an online site, make sure your gold is ensured before you ship it, Kristof noted.
Some buyers include insurance in their service, such as Alloy Market, which says it provides up to $100,000 worth of insurance on gold shipped to the company. If you need more coverage, you can often work with the buyer to raise the insurance.
"What we liked about Alloy and Express Gold Cash is they send you the package, they insure it and they have extremely good reputations in terms of how people talk about how the process went for them," Kristof said. "It is a very transparent process."