How and to Whom Should You Sell Your Scrap Silver?

I thought long and hard about even writing this article. Since I buy scrap silver, and I have other friends in the business. I hope this educational piece does not come back to bite me on the rear. The answer to that question should be no one, unless you are using the proceeds to buy a better grade of silver.  I understand that most of the people who follow this blog have an understanding of the way buying and selling precious metals works. This post is not really aimed at them although it might help them if they are not familiar with the pennyweight (dwt) portion of the Troy system. This post is primarily aimed at the visitor who does not understand how to trade in precious metals. I am particularly adamant about this for two reasons. One may seem a little bit selfish, but I assure you those who know me know I am not selfish. I do believe in capitalism, and I believe that everyone who has a business is entitled to make a profit. However, when the taking of profits becomes so excessive at the expense of others who are less experienced in the business of precious metals, I just call it greed. By now I am sure you are saying to yourself “is he gong to get reason number one. Well, here it is.

I buy scrap silver and gold. I prefer silver and anyone who has read my blog knows why, but I will also buy gold. When I buy scrap silver, I will offer what I believe is a fair price for both parties. This leads me to my second reason. I do not like to see people getting ripped off by the “Cash 4 Gold” dealers or the “Gold Parties” like the Tupperware parties my mom used to host. I did market research when I got into this business to see what the competition would offer a customer for gold or silver. The first time I checked a dealer for prices, silver spot was around $18.00 a Troy ounce. There are 31.1 grams (g) in a Troy ounce. That means .999 silver was $0.58 per gram and Sterling (92.5% pure) would be around $0.54 per gram. The dealer told me that he paid $0.25 per gram, less than half price. I do not remember what his prices on gold were but similarly they were about half of the melt value for that karat. At that time I was paying anywhere from $0.41-0.45 per gram for Sterling. I figured 20-25% of the melt value was enough for me.

To make things worse, I did a little investigative reporting last nght by going into a dealers store. I took a few piece of 14k jewelry with me. To start off, they do not use grams as a unit of measurement, they use pennyweights (dwt). I am sure this is purely to confuse the customer. Few people that are not in the business know how many grams are in a troy ounce, but even less knows how to use pennyweights. A pennyweight is measurement in the Troy system equaling 24 grains or the twentieth part of a Troy ounce (there are 12 ounces in a Troy pound. One dwt is equal to 1.55517g. The price they were paying for gold was $14.00 per dwt of 14k gold and like wise10k gold wad $10.00 per dwt. The spot price for gold was $1101.50 per Troy ounce for .999 or 24k, which mean 24k gold melt value would be $35.42 per gram rounded up, and 14k gold melt value would be $20.66 per gram or $32.13 per dwt. This means that they are paying a good bit less than half of the melt value; they are paying 43.6% of the melt value.

Now, I am not telling you this to get you to sell your gold and silver to me. I am just trying to help you make an educated decision. Just because the “gold man” has a nice office in a strip mall does not mean you are going to get a good price for your PMs. Imagine what the rent on that office must be, you are paying all of his overhead expenses. You are better off finding an independent (like me) that has very little overhead expenses and can pay 70-75% of the melt value. I may even be shooting myself in the foot here but if you cannot find someone willing to pay you a fair price, sell it on Ebay. I buy scrap silver very often on Ebay, and many times I will lose an auction because, regular folk are buying up all the PMs they can, and paying very close to melt value.

I am going to leave you with one more piece of advice. Before you part with that piece of scrap silver of gold, think about our current administration that is spending us into a black hole of debt that we will never be able to get out of. The fiat currency we use now will one day be worthless, and that gold ring or silver spoon you hold in your hand may one day buy your groceries. That is all. Buy silver, buy soon!