Sooner or later, a gold miner will need to sell some of their gold.
Here are 5 mistakes that miners and prospectors often make when they sell. You worked hard to find all that gold, so make sure you do it right and get the best price.
1. Needing to Sell Quickly
The worst position that you can find yourself in is needing to sell your placer gold immediately for some quick cash. If you are desperate for the cash to pay bills, then you are probably going to have to take the first offer that comes along. This is especially true if you didn’t plan ahead and don’t have a gold buyer that you trust.
I recommend that you plan ahead for those “rainy days” and sell some of your gold when times are good. Then you will have the funds available for those unexpected bills (or even that new metal detector) and won’t be desperate to take the first offer that comes your way.
2. Assuming they will get Spot Price for Placer Gold
Placer gold in never, I repeat NEVER totally pure. The gold content has natural impurities as it comes from the Earth. Most commonly these impurities are copper and silver. The amount of actual gold in a piece of gold varies considerably from different areas, anywhere from 60% up to 98% gold content.
Most gold in the United States will average in the 80%-90% range. Gold from Australia is often 95% or higher.
Just remember that these impurities, combined with the fees that are charged by the refinery, will affect the total price you receive for your gold. Sometimes the payout is less than a miner would hope for.
3. Trusting any Refinery
All refineries are not created equal. While their websites will usually state the payouts that you can expect, many miners can tell you from experience that the actual payouts received can vary a great amount.
I have sent the same placer gold (from the same source and same purity) to several different refineries. I found that most of them were close; within a few percent of each other. However, some were considerably lower in their assays, compared to the same gold from different refineries.
Before you sell large quantities of placer gold to a refinery, be sure to send a smaller parcel and see if you are happy with the payouts after smelting. Plus the fees are all a little different, so you will want to take this all into account and see what you actually are getting paid after all is sorted.
4. Sending Gold Nuggets to a Refinery
Natural gold nuggets are quite rare, and will usually command a nice premium over the “melt price” that you would get from a refinery. This is particularly true for any jewelry quality nuggets that you may have; the ones that have nice character and interesting shapes. Even more “average” gold nuggets will still bring more than melt price though.
For example, a nice ¼ ounce nugget that is 85% purity might only get you 75% of spot price after smelting and fees.
That same nugget would likely fetch closer to spot price from a gold nugget dealer who specializes in selling natural nuggets to collectors. If you’ve got a lot of nice nuggets, it’s probably best to check around before sending them off to the refinery.
Also Read: How Rare are Gold Nuggets?
5. Selling to Pawn Shops and Main Street Gold Buyers
This is by far the worst way to sell gold of any kind, but particularly gold dust, nuggets, specimens, etc. You will get only a fraction of their true value.
Pawn shops are notorious for offering ridiculously low prices for placer gold. They will say that it’s because they can’t be certain of the purity without an assay which is true to an extent, but usually the offers are far lower than even the lowest grade placer.
Plus, the pawn shops and cash-for-gold type buyers just end up sending your gold to the refinery anyways, so you’re better off to cut out the middleman and send it to the refinery yourself.
Sell at the Right Time and then Move On
You don’t want to rush a sale. Don’t wait until you are desperate for cash before you sell your gold. Wait until spot price seems high before you sell. Sort out your nicer nuggets and try to get a better price for them from a dealer who specializes in gold nuggets.
One Last Tip:
After you sell your gold, move on and don’t think about it. So often I hear about miners who sold their gold when prices were low, and if they had waited a few years the prices were much higher.
Yeah that’s too bad, but we can’t predict the future. You never know when gold prices are going to peak. If you’ve been following gold price for very long, then you will know that there are always “mountains and valleys,” and despite what anyone says you just can’t know for sure where the price is headed.
After you sell, be happy with the cash you’ve got for it and start searching to hills for some more gold to add to your poke!