What to Check Before Paying Cash for Gold

There are two good reasons for buying gold. One reason is to accumulate assets that retain (and gain) value no matter what happens to the global economy. The other reason is to turn a profit by buying gold at low prices and selling it for at or near market value. Some buyers do both. Whichever you choose to do, know what you’re buying before taking that plunge.

Know the Current Market Value of Gold

Gold Market Value

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Gold prices are constantly in flux. Prices today aren’t the same as last week or last month. If you’re serious about getting the best price for the gold you buy, check the current price before every transaction. There’s no need to fret about a few dollars change during the day, but you’ll need to be aware of the quarterly and monthly trends to get the best value in the gold you buy. The New York Stock Exchange (NYSE) reports the current price of gold throughout the trading day.

Determine the Exact Weight of the Gold

Weight of Gold

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It’s absolutely crucial that you keep accurate scales. Never assume that a coin, bullion or piece of jewelry weighs what the seller says or what is printed on it. Weigh every piece of gold every time you buy. Keep your scales calibrated properly. Having a backup set of scales isn’t a bad idea either.

You’ll need scales that can accurately measure extremely small weights, down to a fraction of an ounce. Note that gold is traded in Troy ounces, which are not the same thing as standard ounces. There are 12 Troy ounces in a pound, whereas there are 16 standard ounces in a pound.

Test the Purity of the Gold

Test Gold Purity

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Again, pay no attention to the markings. Test each piece of gold you buy with a gold test kit, also called an acid testing kit. These aren’t expensive, and can save you a lot of money because you won’t be buying 10 karat gold and paying for 24 karat gold. Test kits also keep you from mistakenly buying gold-plated items that can look and feel real, even to an experienced eye.

What Not to Consider Before Buying Gold

Gold Deal

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Frankly, a person may seem honest but isn’t. Con artists thrive on having good personalities to woo their victims and charm is no indication of honesty. Even if the person is completely honest they may be misinformed. Perhaps the jewelry was a gift and the giver led the person to believe it was real gold when it was fake. Maybe the person bought the piece at a second-hand store and the proprietor assured them it was gold yet it was just heavily plated. Whatever the case, a seemingly honest person is no indication that you’re getting what you pay for. Buyer beware.

Gold buying is lucrative when done properly, but can cost the unaware buyer greatly. Take some time to practice weighing, testing and pricing gold before you begin meeting customers and laying down cash. A little prep work ahead of time can save you hundreds of dollars in the long run.

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