My View: Know your gold's value before selling

Right behind the first tremors of the American financial meltdown in March 2008, many subtle casualties followed that often are not discussed.

The erosion of confidence in the real-estate market, combined with the record-breaking rise in precious metals (i.e. gold hitting more than $1,900 an ounce in August 2011), triggered a mass liquidation of personal collections of gold and silver. The “We Buy Gold” buyers swarmed to cash in.

And many people desperate for cash or attracted by the high prices started selling their jewelry for its perceived value without any real knowledge of the market value.

Precious metal prices fluctuate hourly, and the various metal types and purities make it virtually impossible for sellers to know the scrap values per ounce, pennyweight, gram, grain or karat.

Buyers often bought and melted almost everything they bought as scrap without any knowledge of values in other markets, such as fine jewelry.

Not all buyers operated that way. Some buyers realized some of the jewelry might be marketable for a profit above what they would receive from the refinery for scrap. Buckets of jewelry became available to eager estate and jewelry buyers.

The enormous amount of estate jewelry then flooded the marketplace, and prices plummeted, creating a buyer’s market. Almost everything was selling as scrap. Even the high-end market, which is based on rarity, desirability, condition, maker, provenance and intrinsic value (value of its precious metal content), became a victim of the surging buyer’s market.

As an appraiser of estate jewelry, I often see important pieces of jewelry that are not being properly valued and in many instances are being melted for their scrap value. Among an estate of fine jewelry I evaluated recently, there was a rare Russian bracelet showing its origin, purity, age and the initials of the maker. The bracelet was truly magnificent and rare, one that few people ever have a chance seeing, let alone own.
The daughter of the bracelet’s owner told me her mother used to have two bracelets that matched, one for each arm. She said they had sold one with some other jewelry just the year before to a gold buyer because they needed money for medical bills. She said her mother did not want to part with both; they were passed down from mother to daughter through generations.

Because the bracelet had at least 20 times the value it was sold for, we immediately traced the sale of the bracelet back to the buyers to try to recover it for the estate. Our search disappointedly found it had, in fact, been melted for its gold value. This matched pair of historically important bracelets with traceable provenance and which belonged in a museum will never be together again.

Jewelry has become one of the easiest personal assets to sell with the promise of immediate cash. In some instances, it may be true that unmarketable jewelry may be at one of its highest values today intrinsically as scrap, but those entrusted to buy it are not always the ones who should be entrusted with a decision of what is unmarketable.

It is unrealistic to presume that the new “We Buy Gold” buyers will, or can, divulge to sellers the subtleties of marketable versus scrap. If you are selling jewelry, even if for intrinsic value, consider having a professional appraisal that is certified in identifying and valuing jewelry and gemstones so you can learn the market value of your jewelry and then decide the best way to sell it.

Being an educated seller in today’s market is just as important as finding the correct market in which to sell. Remember: Knowledge is golden.

Denise Kowal is a Sarasota resident and master valuer of jewelry and gemstones.