The rising value of gold has been advertised as a lucrative way to make money in a lean economy, either by investing in it or selling your gold jewelry as a way to get quick cash.
While investing in gold (and other precious metals) can be beneficial, there are risks. The value of gold can fluctuate dramatically and may not yield long-term returns you expected. However, if you research your options, it could be smart addition to your investment portfolio.
You can invest in gold by purchasing gold coins, shares in a mutual fund that contains gold, or shares of a gold mining company. However, most people normally think of buying gold bars or bullion coins. The U.S. Mint produces the American Eagle gold bullion coin, the only coins guaranteed by the United States government. Coins can be purchased from coin dealers, banks and private brokers. Before you buy, do your homework:
- Research and understand the vocabulary associated with investing in gold, such as purity, grading and melt value.
- Investigate the seller with your local consumer protection office or attorney general.
- Avoid high pressure, “buy now” sales tactics.
- Be cautious of endorsements claims that are too good to be true; remember that the U.S. Mint does not endorse any precious metal brokers.
Selling your gold
If you have jewelry you haven’t worn in a long time, you may be interested in selling it to put some extra money in your wallet. While it may seem easy to sell your jewelry, you should still do some research to make sure you don’t get cheated.
Before you approach any buyers, make sure that you know the purity (ex. 10K or 24K) of all your jewelry and keep different values separate to avoid confusion. You should weigh your jewelry yourself or have it evaluated by an independent appraiser so that you have a general idea of the value.
Get estimates from 3 different buyers. When researching potential buyers, ask them if their scales have been tested by your state’s department of weights and measures; there should be a seal to verify.
Don’t let the jewelry out of your sight, or let the buyer take it to another location to weigh; the buyer could switch out your jewelry with lower quality gold. You may also have heard offers to buy your jewelry if you mail it in. Beware of these offers; you have even less control over these types of transactions and run the risk of your jewelry being lost in transit.