With gold trading at record prices, people are looking to shed their chains in record numbers. In the first of a two-part series, NY1's Money Matters reporter Tara Lynn Wagner looks at the process from a seller's point of view.
Steve Gutman is selling his gold for the first time.
"I heard prices are really high right now, so I figured I'd jump on it," says Gutman.
Appraiser Kenneth Lejman of the Gemological Appraisal Labs of America says those who are hoping to get in on the gold rush need to know how precious their metal really is. Purity is weighed in karats -- 14, 18 and so on.
"Eighteen [karats] is .750 or three-quarters pure gold, so obviously the more gold content in the piece the more valuable it is," says Lejman.
This information may be stamped on the item, but a bracelet can't be judged by its cover. It may be gold-plated or it may be a fraud. So to be certain, it needs to be tested, which can be done by an appraiser or buyer in one of several ways.
"The most stringent one being a melt assay, which actually melts down the items and we find out the exact purity that way," says Jose Caba of U.S. Gold Buyers.
Next, it is time to hit the scales, which can be done either in grams or "pennyweights," with 20 pennyweights per ounce. It's a term even a novice like Gutman is suddenly using.
Kenneth Conn of Gem Pawnbrokers says this is hardly surprising, as nearly all his customers are knowledgable of "pennyweight."
"Everybody's educated now with gold, and that's fine because it lets us know they've done their homework and they're really interested in selling their item," says Conn.
Once the weight of the piece and spot price are known, it's just a matter of doing the math. Yet sellers who have a full ounce should not expect to get the full market value, as they should factor in the purity of the pieces and a little overhead.
However, both pawnbrokers and gold refiners alike say sellers are likely to walk away with about 90 to 96 percent of the going rate.
In Gutman's case, it came to $2,593.34.
"I'm definitely making a profit, considering what I bought it at," says Gutman.
New Yorkers who think they have a few grand tucked away in their jewelry box should tune in to the next segment, which deals with possible options for gold buyers, and some options that should maybe be avoided.