Finance

How Pawn Shops Work Out The Price For Your Gold Jewellery

Throughout human existence gold has been an important, valuable and the most sought-after material in the world.  The word ‘gold’ itself has been associated with everything that is good or exceptional. The value of gold has always been consistent, its selling value and cash rewards can be great. But the question most people ask when contemplating pawning valuable jewellery is how much can they get for it?

You might have expensive gold jewellery that has some sentimental significance to you and pressing financial burdens you need to take care of. You can solve your financial issues by pawning your gold jewellery to a pawn shop but before you do, find out how pawn shops work and how they go about pricing your valuables. This way you will know what you can expect and whether pawning is worth it.

Pricing Factors

There are lots of factors that a pawnbroker has to consider when appraising a piece of gold jewellery. A lot of these factors relate to the market and others relate to the piece of jewellery itself.

Current market demand

When you pawn gold jewellery you need to keep in mind that the price is also subject to the forces of supply and demand. You are in a better position to pawn gold jewellery for good price if the items you have are in high demand. Pawnbrokers have to think about how easy it would be to sell your gold jewellery for good price in the event that you default on the loan. If the demand for your particular type of gold jewellery is low, then you can expect a low price for it. However, when you pawn gold jewellery at a time that gold is in high demand then you will get a high price for it.

Specific market demands

The price of gold jewellery is related to the value of the gold which is calculated using the purity and the weight of the jewellery piece – the value is known as the melt value which is the value of gold when it has been melted. Keep in mind that pawnbrokers buy gold to resell and not to melt down.

The kind of jewellery that is always in demand include: tasteful necklaces and bracelets and designer watches. Avant-garde designs and specialized jewellery types do not have a broad appeal. Pawnbrokers might have issues selling such jewellery and because of that they are most likely to give you a low price.

The purity of the gold

The purity or quality of gold is measured in karats. Because good is soft and malleable it is often alloyed with metals like copper or silver. 24k is the highest purity, however jewellery is mostly made from 10, 14 or 18 karat gold. Most jewellery will have the purity stamped somewhere discreet. If you can’t finds stamp then you can have the jewellery tested at jeweller’s shop.

The weight of the gold

You will need to weigh the gold jewellery to calculate how much gold you have. If you have the original paperwork from when the jewellery was purchased, you will have the technical specifications like weight, purity and grading of diamonds.

Current market value

To work out the current value of your gold the purity and the weight you bring are important. These are what the pawnbroker will use in his estimation. Gold has been used for eons. It is a great store of wealth and has been used by many nations as the basis of currencies.

However, the price of gold is not stable. The price you get for pawning your gold may change from one day to the next.  If you need money in a hurry, then the price will be a secondary concern, if you don’t then you can wait a while for the price of gold to go up. If you have the time, try looking at the trends so you get a sense of the optimal price to sell.

 

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