Gold and Silver Guide
Content
LocalGoldBuyer.net
Basic Training Guide
Table of Contents
2. Table of Contents 3. Welcome 4. Gold 7. Getting Started 8. Determining Buy Price 13. The Transaction 15. Other than gold or silver 16. Upgraded Equipment 17. The GXL-24 PRO 18. Advertising 19. Silver 20. Junk Silver 21. Beware of Counterfeit 22. Selling your gold 23. Our top refiner 24. Register with LocalGoldBuyer.net
Welcome
Welcome to the LocalGoldBuyer.net training guide. This guide is written as a basic instructional guide on how to buy and sell gold - such as scrap gold jewelry, dental gold and bullion.
This guide should be used as reference towards the first steps in your journey as a gold buyer. Much of what is learned in this process is acquired through experience, as transactions can vary. We will set out to give you the tools you need to get started. Keep an eye on our video‟s page for a series of videos that compliment this guide. Enjoy.
Gold
In 2006, the U.S. jewelry industry accounted for $44 billion in revenue from 28,000 specialty, department and discount stores. 11 percent came directly from gold jewelry - (diamonds accounting for 46% of the overall jewelry trade). Despite a portion of these figures representing retail sales vs. discount wholesale prices, this puts into perspective the amount of gold likely owned by the average American. No time in human history has an average person owned so much personal gold. With the current economic situation, many people are looking for ways to offset job losses, rise in goods and services and depletion in savings.
Gold Continued…
Because of this, and prices of gold being at all time highs, a strong opportunity to service the needs of those selling their gold is now upon us. Welcome to the beginning of the Urban Gold Rush.
Karat Explanations
24K gold is pure gold. 22k gold contains 22 parts gold and 2 parts of one or more additional metals, making it 91.6% gold. 18K gold contains 18 parts gold and 6 parts of one or more additional metals, making it 75% gold.
Gold Continued…
Karat Explanations
14K gold contains 14 parts gold and 10 parts of one or more additional metals, making it 58.3% gold.
12K gold contains 12 parts gold and 12 parts of one or more additional metals, making it 50% gold.
10K gold contains 10 parts gold and 14 parts of one or more additional metals, making it 41.7% gold. 10K gold is the minimum karat that can be called "gold" in the United States.
Getting Started
To get started in this business, you need a few tools. Below I have listed a basic kit. It‟s a good idea to start with the basic kit to make you familiar with the process, before upgrading some of your equipment later. By shopping online sites like eBay, you may find some of these items bundled together.
– Acid testing kit. This kit should have acid to test 10k, 14k, 18k, 22k, Platinum and Silver. It should also have a testing stone and instructions for the specific kit – 500 x 0.1 gram scale. A battery operated one is best as they are very portable. – A jeweler’s loupe. – A magnet. This is a nice tool to have to quickly determine scrap that is not gold or silver. – A calculator to calculate daily purchase price per gram. – A pair of needle nose pliers. Using an acid kit will allow you familiarize yourself with the look and feel of each karat level.
Determining Buy Price
The price by which you will be purchasing gold from your customers is determined by the daily „spot price‟. This is the price that precious metals are being traded on the open market. I use the Daily Spot Price found here http://www.kitco.com/charts/livegold.html. The daily spot price is green on the chart.
Once you know the daily spot price, you need to calculate at what price you will be buying gold, and at each karat level. You begin the calculations by determining the price of gold per gram. You do this by dividing the spot price of gold by 31.1. There are 31.1 grams in a troy ounce.
Determining Buy Price Continued…
• • • • • For 10 karat (10K) gold, multiply the day's price of gold per gram by .4167. For 14 karat (14K) gold, multiply the gold price per gram by .5833. For 18 karat (18K) gold, multiply the current price of gold per gram by .75 For 22 karat (22K) gold, multiply the current price of gold per gram by .91.666 For 24 karat (24K) gold, simply use the price of gold per gram.
Determining Buy Price Continued…
For example: In our example, the spot price for gold is 1003.21. You multiply 1003.21 by 31.1. 1003.21/31.1 = 32.26. To determine the spot price of each karat level, you multiply 32.26 by the numbers above (in the example that the spot price was 1003.21). • • • • 10k = 32.26 x .4167 = 13.442742 or $13.44 per gram 14k = 32.26 x .5833 = 18.817258 or $18.82 per gram 18k = 32.26 x .75 = 24.195 or $24.20 per gram 24k = 32.26 x 1 = 32.26 or $32.26 per gram
Determining Buy Price Continued…
You can also use an online calculator (http://www.goldprice.org/scrap-gold-pricecalculator.html) to determine the spot price per gram based on the daily spot price of gold. They also include pennyweight (dwt) which is 1.555 grams. The above numbers are not the numbers you will use to pay your customers. Those prices reflect the top value of gold for that day, taking into account impurities and other metals in a piece of jewelry that is less than 24 karat.
Determining Buy Price Continued…
You need to also determine the scrap price (the percentage of spot value you will pay your customers). We recommend somewhere between 50 and 55% of the daily spot. When you are ready to sell your bulk gold to a refiner, they will usually pay you between 70 and 75% of spot. The money you make is the spread between what you pay for the gold and what you sell the gold for at a refiner. We talk about refiners in a later section. We will use the above numbers to describe the process in a mock transaction in a following segment.
The Transaction
• The first step in your transaction process is to determine what is or is not precious metals. The simplest way to do this is with your magnet. Neither gold nor silver are magnetic. Separate all material attracted by the magnet. Next use your jeweler‟s loupe to identify those pieces that are marked. They may be marked with the karat – like 14k, 18k, etc, and separate them.
•
European markings for gold are as follows:
– 18K gold is marked 750 to indicate 75% gold – 14K gold is marked 585 for 58.5% – 12K gold is marked 417 for 41.7%
The Transaction Continued…
• Use your gold tester to test the remaining gold as per the tester instructions, adding them to your separate piles from the previous step. Weigh the total of each pile in grams. Calculate the spot value of each pile using the calculations in the buy price section. For example. If you have 28 grams of 14 karat – using the numbers in previous examples – you would multiply 28 x $18.82 = 526.98. This is the full spot value of your 14 karat value if the daily spot value is 1003.21. 1003.21/31.1 = 32.26 x .5833 = 18.82 x 28 grams = 526.98. Divide this number by your spot percentage (if you are buying at 55% of spot), 526.98 divided by 55%. This gives you $289.84, which is what you pay your customer for their gold. If your refiner pays 75% of spot ($395.24), you make $105.40. Not too bad for a few minutes of work.
• •
Other than gold or silver
Some of your pieces may include other valuable other than precious metals like diamonds or pearls. They may also include settings like non-valued stone, springs and clasps. You can offer to remove these items and allow your customer to keep them. As you continue to do business, it may be a good idea to keep some of these items to compare weights of items in the future.
For example, a decretive setting from a recycled piece can be used to compare weight in a similar piece, deducting the known weight from the piece being analyzed. Some pieces may also have different karat segments. Keep records of such pieces for further reference.
Upgraded Equipment
At some point you may want to upgrade to electronic gold testing equipment. While there are various makes and models, it is important to carefully read reviews of your available options. Some are not as accurate as your acid testing equipment and others do not test past 18k. We recommend that if you decide to make this leap, you seriously consider the Tri Electronics GXL-24 Pro Electronic Gold Tester. This tester tests up to 24 karat weight. It also tests both yellow and white gold. This tester uses a gel pen. Be careful not to use this tester on gold bullion or coins as it may discolor them.
The GXL-24 PRO
“State of the art, complete karat range from 6 to 18 karats. Microprocessor based technology allows user safely and non- destructively determine gold content of alloys up to 24 karat in all four colors. Karat readings appear directly on LCD display. Highly recommended for those who regularly test gold above 18 karats. Detects platinum and gold plating. Packaged in durable hard plastic case. Comes with instructional video. Manufacturers repair or replacement warranty three years.” (Above quoted directly from Tri Electronics site http://www.trielectronics.com/gold.html)
Size: 12” X 10” X 3” (305 X 254 X 76mm) Weight: 3 Lb (1.35 Kg) Power: Two 9 Volt Batteries
Advertising
Advertising your business is one of the most important parts of your business. Utilizing free options like craigslist is one option. When advertising, think like someone trying to generate some additional income. Business cards, flyers, newspaper ads are also very powerful ways to advertise. One of the most powerful marketing tools are referrals. Holding gold buying parties, giving the host 10% of the total gold purchased will add rocket fuel to your business. This gives your customers additional ways to offset their revenue troubles. You can also offer the 10% referral fee to everyone who attends your parties, leveraging the attendance to perpetuate the viral aspect of your business.
Silver
You should only buy sterling silver which is marked above .925 or 92.5 percent. You will also find silver marked .999, which is close to pure silver. All sterling silver marked below .925 should not be considered as it has little to no refining value. Silver is an excellent precious metal to buy. Many say that silver will out perform other precious metals in the coming years. Being paid in silver from refineries is also an option, hedging the slide in the dollar. Many of our buyers choose this option when dealing with one of our refineries.
“Junk Silver”
Junk silver is silver used in U.S. coinage. It is labeled as “junk” because the coins do not have any intrinsic collectable value beyond it‟s silver content. This coinage reflects tender usually minted prior to 1965. Dimes, quarters, half dollars and silver dollars are 90% silver in most cases. Here is a link that gives current prices of junk silver, based on daily spot value - http://www.coinflation.com/.
Examples of Junk Silver Coins 1942-1945 Nickel 1916-1945 Mercury Dime 1946-1964 Roosevelt Dime 1932-1964 Quarter 1916-1947 Half Dollar 1948-1963 Half Dollar 1964 JFK half dollar 1965-1970 Half Dollar (40%) 1878-1921 Morgan Dollar 1921-1935 Peace Dollar 1971-1976 Eisenhower Dollar (40%)
Beware of Counterfeit
Use caution when purchasing junk silver and other precious coins online on sites like eBay. As the interest in precious metals makes it‟s way to the average person, more counterfeit pieces are being made and sold. Many of these counterfeit rings are from China. Some popular denominations are Morgan dollars, China Pandas and common 90% junk silver. Take a minute to read through the following article about counterfeit coins from china http://coins.about.com/od/worldcoins/ig/ChineseCounterfeiting-Ring/Chinese-Fake-Coin-Minting.htm
*Remember – TEST TEST TEST!
Selling your bulk gold
A list of approved refineries is updated regularly. We have established relationships with these refineries and leverage our total purchasing power to negotiate the highest possible price for your bulk gold.
As a gold buyer, selling your gold to a refiner is the process by which you cash in on your investment. Televised “Cash for Gold” businesses will not offer you the highest possible price on your gold. They are often middlemen, selling their gold to refineries. Beware as these companies rely on the uneducated populous to send in their valuables, often giving less than 10 - 30% of spot value.
Our top refiner
Contact Mike Kim at The Gold Pig to sell your gold. In addition in paying top price for scrap gold sent in small amounts, they also offer a referral commission on all gold sent their way from those you refer. To be eligible for the referral commissions, you must let them know that LocalGoldBuyer.net sent you. By doing so, you will receive 10% commissions on all gold buyers you send their way. You will also receive 5% commissions on their referrals. The Gold Pig is the only refiner in the industry rewarding multi-tier commissions. Contact Mike Kim at:
602 E. Imperial Hwy Los Angeles, CA 90059 Phone - 888-GOLD-270
Register with LocalGoldBuyer.net
Register as a gold buyer on LocalGoldBuyer.net to access our updated list of legitimate precious metal refineries. By offering the highest possible price to your local customers, you will be able to offer referrals, and beat out jewelry shops, pawn shops and televised gold buying companies.
Registering with LocalGoldBuyer.net also gives you exposure on our map. Our goal is to establish the site as the premier place to find trusted local gold buyers. If you have any questions, please feel free to contact me at [email protected]
Basic Training Guide
Table of Contents
2. Table of Contents 3. Welcome 4. Gold 7. Getting Started 8. Determining Buy Price 13. The Transaction 15. Other than gold or silver 16. Upgraded Equipment 17. The GXL-24 PRO 18. Advertising 19. Silver 20. Junk Silver 21. Beware of Counterfeit 22. Selling your gold 23. Our top refiner 24. Register with LocalGoldBuyer.net
Welcome
Welcome to the LocalGoldBuyer.net training guide. This guide is written as a basic instructional guide on how to buy and sell gold - such as scrap gold jewelry, dental gold and bullion.
This guide should be used as reference towards the first steps in your journey as a gold buyer. Much of what is learned in this process is acquired through experience, as transactions can vary. We will set out to give you the tools you need to get started. Keep an eye on our video‟s page for a series of videos that compliment this guide. Enjoy.
Gold
In 2006, the U.S. jewelry industry accounted for $44 billion in revenue from 28,000 specialty, department and discount stores. 11 percent came directly from gold jewelry - (diamonds accounting for 46% of the overall jewelry trade). Despite a portion of these figures representing retail sales vs. discount wholesale prices, this puts into perspective the amount of gold likely owned by the average American. No time in human history has an average person owned so much personal gold. With the current economic situation, many people are looking for ways to offset job losses, rise in goods and services and depletion in savings.
Gold Continued…
Because of this, and prices of gold being at all time highs, a strong opportunity to service the needs of those selling their gold is now upon us. Welcome to the beginning of the Urban Gold Rush.
Karat Explanations
24K gold is pure gold. 22k gold contains 22 parts gold and 2 parts of one or more additional metals, making it 91.6% gold. 18K gold contains 18 parts gold and 6 parts of one or more additional metals, making it 75% gold.
Gold Continued…
Karat Explanations
14K gold contains 14 parts gold and 10 parts of one or more additional metals, making it 58.3% gold.
12K gold contains 12 parts gold and 12 parts of one or more additional metals, making it 50% gold.
10K gold contains 10 parts gold and 14 parts of one or more additional metals, making it 41.7% gold. 10K gold is the minimum karat that can be called "gold" in the United States.
Getting Started
To get started in this business, you need a few tools. Below I have listed a basic kit. It‟s a good idea to start with the basic kit to make you familiar with the process, before upgrading some of your equipment later. By shopping online sites like eBay, you may find some of these items bundled together.
– Acid testing kit. This kit should have acid to test 10k, 14k, 18k, 22k, Platinum and Silver. It should also have a testing stone and instructions for the specific kit – 500 x 0.1 gram scale. A battery operated one is best as they are very portable. – A jeweler’s loupe. – A magnet. This is a nice tool to have to quickly determine scrap that is not gold or silver. – A calculator to calculate daily purchase price per gram. – A pair of needle nose pliers. Using an acid kit will allow you familiarize yourself with the look and feel of each karat level.
Determining Buy Price
The price by which you will be purchasing gold from your customers is determined by the daily „spot price‟. This is the price that precious metals are being traded on the open market. I use the Daily Spot Price found here http://www.kitco.com/charts/livegold.html. The daily spot price is green on the chart.
Once you know the daily spot price, you need to calculate at what price you will be buying gold, and at each karat level. You begin the calculations by determining the price of gold per gram. You do this by dividing the spot price of gold by 31.1. There are 31.1 grams in a troy ounce.
Determining Buy Price Continued…
• • • • • For 10 karat (10K) gold, multiply the day's price of gold per gram by .4167. For 14 karat (14K) gold, multiply the gold price per gram by .5833. For 18 karat (18K) gold, multiply the current price of gold per gram by .75 For 22 karat (22K) gold, multiply the current price of gold per gram by .91.666 For 24 karat (24K) gold, simply use the price of gold per gram.
Determining Buy Price Continued…
For example: In our example, the spot price for gold is 1003.21. You multiply 1003.21 by 31.1. 1003.21/31.1 = 32.26. To determine the spot price of each karat level, you multiply 32.26 by the numbers above (in the example that the spot price was 1003.21). • • • • 10k = 32.26 x .4167 = 13.442742 or $13.44 per gram 14k = 32.26 x .5833 = 18.817258 or $18.82 per gram 18k = 32.26 x .75 = 24.195 or $24.20 per gram 24k = 32.26 x 1 = 32.26 or $32.26 per gram
Determining Buy Price Continued…
You can also use an online calculator (http://www.goldprice.org/scrap-gold-pricecalculator.html) to determine the spot price per gram based on the daily spot price of gold. They also include pennyweight (dwt) which is 1.555 grams. The above numbers are not the numbers you will use to pay your customers. Those prices reflect the top value of gold for that day, taking into account impurities and other metals in a piece of jewelry that is less than 24 karat.
Determining Buy Price Continued…
You need to also determine the scrap price (the percentage of spot value you will pay your customers). We recommend somewhere between 50 and 55% of the daily spot. When you are ready to sell your bulk gold to a refiner, they will usually pay you between 70 and 75% of spot. The money you make is the spread between what you pay for the gold and what you sell the gold for at a refiner. We talk about refiners in a later section. We will use the above numbers to describe the process in a mock transaction in a following segment.
The Transaction
• The first step in your transaction process is to determine what is or is not precious metals. The simplest way to do this is with your magnet. Neither gold nor silver are magnetic. Separate all material attracted by the magnet. Next use your jeweler‟s loupe to identify those pieces that are marked. They may be marked with the karat – like 14k, 18k, etc, and separate them.
•
European markings for gold are as follows:
– 18K gold is marked 750 to indicate 75% gold – 14K gold is marked 585 for 58.5% – 12K gold is marked 417 for 41.7%
The Transaction Continued…
• Use your gold tester to test the remaining gold as per the tester instructions, adding them to your separate piles from the previous step. Weigh the total of each pile in grams. Calculate the spot value of each pile using the calculations in the buy price section. For example. If you have 28 grams of 14 karat – using the numbers in previous examples – you would multiply 28 x $18.82 = 526.98. This is the full spot value of your 14 karat value if the daily spot value is 1003.21. 1003.21/31.1 = 32.26 x .5833 = 18.82 x 28 grams = 526.98. Divide this number by your spot percentage (if you are buying at 55% of spot), 526.98 divided by 55%. This gives you $289.84, which is what you pay your customer for their gold. If your refiner pays 75% of spot ($395.24), you make $105.40. Not too bad for a few minutes of work.
• •
Other than gold or silver
Some of your pieces may include other valuable other than precious metals like diamonds or pearls. They may also include settings like non-valued stone, springs and clasps. You can offer to remove these items and allow your customer to keep them. As you continue to do business, it may be a good idea to keep some of these items to compare weights of items in the future.
For example, a decretive setting from a recycled piece can be used to compare weight in a similar piece, deducting the known weight from the piece being analyzed. Some pieces may also have different karat segments. Keep records of such pieces for further reference.
Upgraded Equipment
At some point you may want to upgrade to electronic gold testing equipment. While there are various makes and models, it is important to carefully read reviews of your available options. Some are not as accurate as your acid testing equipment and others do not test past 18k. We recommend that if you decide to make this leap, you seriously consider the Tri Electronics GXL-24 Pro Electronic Gold Tester. This tester tests up to 24 karat weight. It also tests both yellow and white gold. This tester uses a gel pen. Be careful not to use this tester on gold bullion or coins as it may discolor them.
The GXL-24 PRO
“State of the art, complete karat range from 6 to 18 karats. Microprocessor based technology allows user safely and non- destructively determine gold content of alloys up to 24 karat in all four colors. Karat readings appear directly on LCD display. Highly recommended for those who regularly test gold above 18 karats. Detects platinum and gold plating. Packaged in durable hard plastic case. Comes with instructional video. Manufacturers repair or replacement warranty three years.” (Above quoted directly from Tri Electronics site http://www.trielectronics.com/gold.html)
Size: 12” X 10” X 3” (305 X 254 X 76mm) Weight: 3 Lb (1.35 Kg) Power: Two 9 Volt Batteries
Advertising
Advertising your business is one of the most important parts of your business. Utilizing free options like craigslist is one option. When advertising, think like someone trying to generate some additional income. Business cards, flyers, newspaper ads are also very powerful ways to advertise. One of the most powerful marketing tools are referrals. Holding gold buying parties, giving the host 10% of the total gold purchased will add rocket fuel to your business. This gives your customers additional ways to offset their revenue troubles. You can also offer the 10% referral fee to everyone who attends your parties, leveraging the attendance to perpetuate the viral aspect of your business.
Silver
You should only buy sterling silver which is marked above .925 or 92.5 percent. You will also find silver marked .999, which is close to pure silver. All sterling silver marked below .925 should not be considered as it has little to no refining value. Silver is an excellent precious metal to buy. Many say that silver will out perform other precious metals in the coming years. Being paid in silver from refineries is also an option, hedging the slide in the dollar. Many of our buyers choose this option when dealing with one of our refineries.
“Junk Silver”
Junk silver is silver used in U.S. coinage. It is labeled as “junk” because the coins do not have any intrinsic collectable value beyond it‟s silver content. This coinage reflects tender usually minted prior to 1965. Dimes, quarters, half dollars and silver dollars are 90% silver in most cases. Here is a link that gives current prices of junk silver, based on daily spot value - http://www.coinflation.com/.
Examples of Junk Silver Coins 1942-1945 Nickel 1916-1945 Mercury Dime 1946-1964 Roosevelt Dime 1932-1964 Quarter 1916-1947 Half Dollar 1948-1963 Half Dollar 1964 JFK half dollar 1965-1970 Half Dollar (40%) 1878-1921 Morgan Dollar 1921-1935 Peace Dollar 1971-1976 Eisenhower Dollar (40%)
Beware of Counterfeit
Use caution when purchasing junk silver and other precious coins online on sites like eBay. As the interest in precious metals makes it‟s way to the average person, more counterfeit pieces are being made and sold. Many of these counterfeit rings are from China. Some popular denominations are Morgan dollars, China Pandas and common 90% junk silver. Take a minute to read through the following article about counterfeit coins from china http://coins.about.com/od/worldcoins/ig/ChineseCounterfeiting-Ring/Chinese-Fake-Coin-Minting.htm
*Remember – TEST TEST TEST!
Selling your bulk gold
A list of approved refineries is updated regularly. We have established relationships with these refineries and leverage our total purchasing power to negotiate the highest possible price for your bulk gold.
As a gold buyer, selling your gold to a refiner is the process by which you cash in on your investment. Televised “Cash for Gold” businesses will not offer you the highest possible price on your gold. They are often middlemen, selling their gold to refineries. Beware as these companies rely on the uneducated populous to send in their valuables, often giving less than 10 - 30% of spot value.
Our top refiner
Contact Mike Kim at The Gold Pig to sell your gold. In addition in paying top price for scrap gold sent in small amounts, they also offer a referral commission on all gold sent their way from those you refer. To be eligible for the referral commissions, you must let them know that LocalGoldBuyer.net sent you. By doing so, you will receive 10% commissions on all gold buyers you send their way. You will also receive 5% commissions on their referrals. The Gold Pig is the only refiner in the industry rewarding multi-tier commissions. Contact Mike Kim at:
602 E. Imperial Hwy Los Angeles, CA 90059 Phone - 888-GOLD-270
Register with LocalGoldBuyer.net
Register as a gold buyer on LocalGoldBuyer.net to access our updated list of legitimate precious metal refineries. By offering the highest possible price to your local customers, you will be able to offer referrals, and beat out jewelry shops, pawn shops and televised gold buying companies.
Registering with LocalGoldBuyer.net also gives you exposure on our map. Our goal is to establish the site as the premier place to find trusted local gold buyers. If you have any questions, please feel free to contact me at [email protected]
