Do you have buried treasure in your jewelry box?
You know that old ring — the one stuffed away in the corner of your
jewelry box? A dusty old clunker of a ring, passed down from a dearly
departed relative. You would feel guilty getting rid of it, yet the ring
is so hopelessly unfashionable that you've never worn it and know you
never will.
Or maybe you have a gold bracelet from a high-school or university
sweetheart. Back in those early, innocent days of dating (when gold was
selling at less than $400 an ounce), a gold bracelet said: "I think
you're awesome and so I will buy you jewelry because I know girls like
that, but I'm only 20 and if I buy you a ring, you might freak out and
think it means marriage." Back then, those 14K serpentine links meant
everything to you. Now, the bracelet looks kind of um, quaint, and you can't even remember which cute boy gave it to you.
Nostalgia aside, the price of gold recently rose to over $1,700 an
ounce. Dig deep - you may have buried treasure in your jewelry box.
Why is the price of gold so high?
When financial markets are turbulent and economic uncertainty looms,
investors seek "safe havens" and that means buying up gold. Even
governments will buy gold to shore up their own reserves if they are
feeling panicked, as Greece, South Korea and Thailand have recently
done. With greater demand, supply shrinks and the price shoots upward.
Retail value versus salvage value
When you buy gold jewelry, you are paying for more than just the cost
of the metal. A jeweler must buy gold to make her own designs and
therefore her cost of business is massively affected by the
ever-changing price of gold. She puts in her design skills, labour and
factors in overhead and marketing costs to finally arrive at a retail
price for the gold ring she creates.
When you bring in a ring to sell to a jeweler, she may buy it for
'scrap' or 'salvage'. She will remove any stones from the jewelry, melt
the metal down and pay to have it "refined" — to the point where the
metal can be used to make new jewelry. The condition or type of jewelry
you bring in is not important — the price the jeweler will pay you is
based on the market price of gold plus a fee for the service of
refining.
Selling second-hand
If your gold has some unique vintage appeal, is set with some
fabulous quality stones, or is by a famous designer such as a Tiffany
& Co. (NYSE: TIF) or Harry Winston (TSX:HW),
you may consider selling the piece to a second-hand jeweler, placing on
consignment or selling through an auction house. For any of these
methods, you will need to have an appraisal, confirming the
authenticity, quality, design and value of the piece of jewelry.
The price you get for 'estate jewelry' will depend on the quality,
condition, rarity and intangible 'vintage' value. Choose a jeweler or
auction house that specializes in vintage and estate jewelry. Make sure
you understand any fees involved for photography, marketing,
cataloguing, insurance and commission. You will likely receive a share
of the profit, so once the piece sells don't expect to earn the
full-appraised value. However, if the sale price is significantly higher
than what you could fetch on eBay (or surprises you by selling for more
than the appraisal), you might end up with a nicer sum than you expect.
Being refined about it
Hilary Druxman of Hilary Druxman Design - a
Winnipeg-based designer who has designed private collections for Saks
Fifth Avenue, Banana Republic and Club Monaco - offers the following
tips when selling your old gold:
1. Gather it up — Search the corners of
your jewelry box for broken chains, unmatched earrings or pieces you
never wear and bring them in for a bulk sale. "Little pieces really add
up," says Hilary. "People are surprised when they bring in a small bag
of what they considered junk and then find out what the gold is worth."
2. Karats matter — The higher the
karats, the better price you will get. Gold jewelry that is marked 24K
(karats) is pure gold and will command the highest salvage value as well
as the highest resale value. 18K, 14K, 12K and 10K are alloys -
mixtures of gold and other metals - and will therefore have lower
salvage value.
3. Not just gold — Silver and platinum are also experiencing high market prices and can be sold to jewelers for melting down and refinement.
4. Keep your stones — According to
Hilary, most customers choose to keep the stones she unsets from their
gold jewelry. Gems often show wear and tear (yes, even diamonds!) and
don't hold the value the same way as metal, which can be refined. Since
jewelers and diamond traders are used to buying loose stones at
wholesale prices, they are not likely to be interested in buying a used
stone for anything but a bargain bin price. The exception would be
stones from some estate jewelry, or what the auction houses would call
"an important stone" — you know, the kind of diamond that comes with its
own name.
5. Deal with a reliable jeweler — Stay
away from those "Cash for Gold" pawnshops! These shops are the
equivalent of going to a paycheque-cashing service rather than your own
bank to cash a cheque. You will be charged high fees and not receive as
favourable a rate than if you go to a reputable jeweler whom you can
trust. As well, in working with a jeweler, you can negotiate to have
your metal recast or stones reset into new creations.
6. Recast & reset— Rather than
taking the cash, once your jewelry has been melted down, you may choose
to have it fashioned into a new piece that you will love. This way you
can still carry the spirit of granny's gift with you whenever you wear
your new bling. You can do the same with any stones the jeweler has
unset from the scrap metal.
7. Trade up — If you choose to sell
your gold to a jeweler whose designs you love, you can always use the
proceeds of your metal meltdown as a credit toward one of the shop's
lovely creations.
Golden karma
To assuage any guilt you might feel at selling an old sentimental
piece of jewelry, consider the good karma that comes from reusing,
reselling and recycling. At the Hilary Druxman Inc. workshop in
Winnipeg, all scrap metal and sweepings produced in the manufacturing of
jewelry are saved and recycled. Even dust is sent off to be refined and
recycled back into the world's precious metal market.
Hilary encourages clients to bring her their old gold as part of this
commitment to reduce the long-term effects of metal mining on the
earth's natural resources. "Old metals, whether gold, silver or
platinum, can be melted down and turned into new jewelry," Hilary says,
"This minimizes the demand for newly mined metals."
Now, how's that for a feel-good ending? You get a little extra money
in your pocket and help save the world. We think your granny would
approve.
GoldenGirlFinance.ca is a free personal finance and education site for women.
Nothing contained herein is intended
to provide personalized financial, legal or tax advice. Before
implementing any financial strategy, you should obtain information and
advice from your financial, legal and/or tax advisers who are fully
aware of your individual circumstances.
