Gold selling Tips - old jewelry

September 7, 2022
Devinder Dhingra

Sundaram (The Guidance)

The first thing: the process. When we go to sell our old jewelry that doesn’t have a hallmark stamp, there would generally be three types of offers:

1. A jeweler will physically check your gold and then offer you a price with a certain deduction that can range from 10% to 18% or even more. The deduction would be done in either the weight of gold or the price. For example, if the weight of your jewelry is 20g and he offers you a ten percent deduction, it means the net weight of gold that he would consider for payment shall be 18g.

2. Your jewelry shall be measured for purity in a machine. This is a preliminary examination to give you an indicative price but is not the final one. If you agree to go ahead, your gold will be weighed, melted to remove dust et cetera, weighed again after melting and then measured for purity once more in the same machine. The final purity that would be obtained after the whole process will only be considered for payment.

3. You had bought it from a certain shop and the seller had promised you a certain value if you went to the same shop again. In this case, there is no verification involved but in most of the cases, you’ll have to buy another piece of jewelry or may lose a lump sum by default if there was a certain deduction mentioned at the time of purchase.

The next thing: pricing.

Gold jewelry is mostly in 22 carat in India, which means 916 i.e. 91.6% purity. It is simple to understand since 24 carat is 100% and 22 carat means 22 divided by 24. When you go to sell your gold, you may find that the purchase price of jewelers is slightly less than their selling price. This is to compensate for the efforts involved in recasting gold. Some sellers may even offer the same purchase price as that of their selling price, especially if you buy some jewelry from them in exchange.

After you know their purchase price, the next thing is deduction. For process 1 and 3 as described above, you know the deduction in advance but in the case of process 2 that involves melting and checking purity in the machine, the deduction would only happen if purity of your gold is less than 916. If your gold was pure (above 91%), no deduction; you’ll be paid the whole amount. In fact, if your gold purity comes out as 95%, you may even be given an extra price.

In the case of a purity less than 22 carat, you’ll get the less price. The deduction in this case shall be in percentage of the 24 carat gold and not 22 carat gold. This needs to be remembered. For example, if your gold after the melting process is found to be 85% in purity, there will be a deduction of 15% on the price of 22 carat gold. This is to compensate for the loss that occurs during purification.

Some jewelers may offer a flat deduction, i.e. if purity is 21 carat, a deduction of 10%; if 20 carat, a deduction of 15%, and so on.

If your gold purity comes out as less than 18 carat after melting, the jewelers may not buy your gold. Keep this in mind. At the minimum, purity has to be 17 carats to make you sell your gold.

Now, the tips:

1. If you’re sure about your gold quality, do not go for a standard deduction or physical verification. Choose process 2, i.e. melting and measuring purity. You may gain a significant amount by doing this.
2. The purchase price offered by a jeweler should not vary more than 150 INR from the selling price, i.e. if their selling price of 22 carat gold is 4900, their purchase price should be in the range of 4750-4900 INR.
3. Be attentive and careful when the melting process is carried out. Do not be shy. Remember, the weight of a jewelry item shown before melting and after melting does not differ much. Generally, the loss occurred during melting is hardly 0.1 to 0.2 gram per 15 gram of the gold item. Therefore, be extra careful during measurement.
4. Ensure that during melting, the person performing the melting does not try to hide a tiny part of your gold. Keep your eyes wide open.
5. If you are selling a large amount of gold or purity of your gold after melting comes out as less than 18 carat, better take a chance with purification. In the case of purification, the gold that is obtained after the melting process is purified to convert it into 24 carat gold and what you obtain is the gold in biscuit form bearing a hallmark 999 purity. Of course, the weight of gold during purification will reduce depending on the purity and thus needs some additional caution and experience.
6. American diamonds, stones et cetera shall be removed from your jewelry item and have no resale value. Only diamonds and gems command a price. Thus, the weight of only gold will be considered and you may also see a very slight fall in the weight due to wear and tear/ polishing over a period of time when compared to the weight of gold that you had bought.

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