Golden rules on cashing in gold

If you want to capitalize on high gold prices, these tips can help you be an informed seller. With gold at all-time highs and an economic downturn such as our nation is in, many people are looking to find cash.

People are finding that gold can provide the cash they are looking for.

Most have old jewelry that is no longer wanted. Whether it was a piece that broke, something that time has just passed by or a gift from an ex, there are a host of companies seeking to buy gold.

Here is some helpful information on how not to get taken.

Many companies offer only 25 percent to 33 percent of the actual value, while others pay much more. Therefore, knowing how to determine the value of your gold is paramount.

Karat, or purity, is the first factor. Jewelry is generally not made of pure gold but rather an alloyed of gold such as 14 karat, which is only 58.5 percent pure.

You can determine purity by taking the karat and dividing it by 24.

Weight is the second factor. Gold is measured in troy. The avoirdupois scale is only 28.35 grams per ounce and troy is 31.1 grams per ounce.

Thirdly, value will be determined by the spot price of gold, which is always quoted in troy ounces.

By factoring these numbers, you can determine the value of your gold.

For example, if you have a 10 gram, 14 karat necklace and gold is at $950, its value would be $178.70 ‹ $950 x .585 (karat) = $555.75, divided by 31.1 = $17.87 (price per gram) X 10 = $178.70.

Making sure you are dealing with a company licensed to buy gold is highly recommended. In Nevada, gold buyers are required to either have a second-hand license, such as a coin dealer, or a pawn license.

The big advantage for a pawn shop is that you can buy your items back, but you may not receive as much as you would from an outright buyer.

As the gold market has heated up, there are a number of companies trying to buy gold that are not licensed by the state of Nevada. Dealing with a licensed company not only protects you, it also protects our community.

Companies willing to buy gold must make a profit, but not all are equal. Make sure you know how to determine the value of your gold before you sell.

• Allen Rowe is the owner of Northern Nevada Coin in Carson City.