A Field Trip to the Gold Dealer – Part 2

This past week, a co-worker decided to revisit the gold dealer.  I asked if I could tag along again as I had the first time.  See my earlier post “A Field Trip to the Gold Dealer”  where I described my first impressions.

The first time we went, gold was going for $1244 an ounce, this second time, gold was at $1257 per ounce.  This may be why he decided to sell some broken jewelry.  My friend spoke with the gold dealer and they sat down to look at the pieces.  I just sat back and watched, since it was all very fascinating.  Most of the gold he brought were broken chains, earrings missing the other piece, a ring or two were missing their gems.  Some pieces were discarded by older relatives, there was even a gold tooth in the pile!  The gold dealer looked at each piece with a magnifying glass.  He then rubbed the gold into this whetstone, then tested the marking with some kind of acid.  In some cases, he poured the acid directly on the gold, presumably to see if the gold color would flake off.  I even saw smoke wafting from the acid reaction to the gold, which made me wonder how safe was it to handle this acid without gloves.  The dealer left the gold into a couple of piles, one pile was acceptable, another pile were those pieces that had a gem or two, and the last pile were the unacceptable ones.  They did not accept gold-filled jewelry, or and other items that did not react properly.  My friend was quite surprised as some of the rejected items had been in the family for years.  The gold dealer said they get that reaction a lot.

Once they completed the examination, they weighed the gold and told my friend the total.  I did notice one or two pieces that had stones like jade or pearl just got lumped in with the gold and did not get an additional valuation.  I would think it would be a good idea to remove any gems ahead of time.  I then walked away to give my friend some privacy in finishing up his transaction.  He seemed pleased with the result, as he walked away with a few hundred dollars.  He then went to the other counter to purchase some gold coins.

While he was looking doing his transaction, I walked over to the silver counter.  When we last visited, silver was going for $18 an ounce, this time, it was going for $20.  The dealer was selling the painted American Eagle silver coins for $21.50 each, while the all silver American Eagles were going for $22.75.  I would have liked to take a photo, but camera’s and cell phones were not allowed in the store.  Lots of other customers were buying the silver coins that day.  One man proudly declared he was buying a silver coin for each of his grandchildren for their birthdays, and he made it a tradition to give a silver coin every year.  I thought, “What a great idea!,” since the value would just keep increasing.

I am not yet in the position to be buying precious metals, as I continue to build up food and other emergency supplies.  Once I am ready, I will start with junk silver, collect all the nickels I can, and this coming Christmas, will consider picking up some silver coins as gifts.



A Field Trip to a Gold Dealer

Lately I have been seeing a lot of articles discussing the merits of buying gold and silver.  See  “Gold is not Just for Doom and Gloomers Anymore

Being new at this, I do not know the first thing about how and where to buy gold.   I’ve not had enough extra funds to set aside to actually buy gold just yet.  I am still in the “buy enough food for six months; finish up the bug out bags” stage.  But a co-worker who is a coin collector mentioned one day at lunch that he was on his way to a gold dealer to check out a certain coin so I asked if I could tag along.  I figured it would be an interesting little field trip to the gold store, all in the name of research.

We drove for about 15 minutes before arriving at this free-standing two-story building, with a marquee showing the price of gold for the day.  We entered a set of double doors, and found another locked door inside.  A lady working behind a glass window looked us over then buzzed us in.  Inside we saw wood shelves with glass cases along each wall with various items on display.  There were various types of rings, pendants, necklaces and even Faberge eggs on display.  In short, the place looked a lot like a jewelry store, without all the emotional advertising to entice you to buy.  The dealers were very matter of fact about doing business, they were straightforward and did not seem to care one way or another if you made a purchase or not.   In the middle of the room were more glass cases and several customers were being helped with their transactions.  One lady was unwrapping various types of silverware-cups, gravy bowls, saucers etc., so she appeared to be selling the pieces.  Another man had a bag full of gold jewelry.  My friend stopped at the gold coin area, and looked at various coins.  They had the Buffalo and Eagle coins in various sizes, 1 ounce, half ounce etc. The lowest denomination they had that day was the Chinese Panda coin at 1/20 ounces, selling for $77 each.  My friend was looking for Eagles at the low denomination but they only had Pandas.

I spoke with the lady behind the counter regarding pricing, and she explained that you get more gold for your money if you buy the higher denominations, such as the full ounce or even over one ounce, since the markup for these items is not as high as for the little 1/20 coins.  However, I was thinking if you were ever in a situation where you need to use the coins as currency or barter, the small denominations would still be good to have, as you would not want to have to cut the larger coins into pieces.   But that is just my prepper mind thinking through possible scenarios.

Apparently their inventory varies daily, it just depends on what people come in to sell that day.  One lady came in and sold her Krugerrands, and the coins were immediately set on display for the next buyer.

My friend observed the store did not have as much gold coin inventory as they did a few years ago and that is likely due to current popularity of gold.  I asked him if he ever went to pawn shops to buy gold coins; he said he has checked out a few but he was convinced the places he went to were not giving him a fair deal so he preferred the gold dealers.   He asked me if I wanted to look at anything else, but my curiosity was satisfied so we left.  Neither of us bought anything but I was glad I went, as I now know where to go if I am ever in the market for gold.  On the  drive back he asked me if I looked at the silver for sale, I admitted I only looked at gold.  I asked if I can tag along again the next time he wants to look at coins; when we go again, I will make sure to check out silver.