Buy Gold In A Pawn Shop? Sure But 6 Things You Must Consider (2024)

FAQs

Is it a good idea to buy gold from a pawn shop? ›

Pawnshop are a surprisingly great choice when it comes to buying gold. If you choose to buy gold from a jewelry store, be prepared to pay top dollar for your purchase. On the other hand, you might find great deals on gold in a pawnshop.

If you don't repay your loan, the pawnbroker will sell the gold — and they need to generate a profit. That means you'll get less than the actual gold value. As a general guideline, expect to get 55 to 75 percent of the total gold value (assuming the piece is in good shape).

One common method used by pawnbrokers is the magnet test. Gold is not magnetic, so if a piece of jewelry is attracted to a magnet, it is highly likely that it is not made of genuine gold.

Con: You'll need to store your gold

One significant difference between these investments is that when you buy gold, you'll have to have a safe place to store it (unlike stocks and bonds which are held in your investment account). That may be in a safety deposit box or a gold depository.

One of the biggest mistakes people make when buying gold is buying from unreliable sources. There are many dubious dealers out there who sell fake or low-quality gold at high prices. It's crucial to buy gold bars or coins from a trustworthy dealer to ensure it's genuine and high-quality.

How Do Beginners Buy Gold? Mutual funds and ETFs are probably the smartest options for beginners. Each share of these securities represents a fixed amount of gold, and you can easily buy or sell these funds in your brokerage account or retirement account.

It's best to buy from a reputable source to ensure that you are buying precisely what is represented. You also can purchase physical gold from online gold dealers. They sell high-quality physical gold and ship it to your home or store in a secured vault.

If you have gold in the form of bullion bars or coins, you'll get by far the best prices by selling them to a dealer that specializes in gold bullion. For gold watches and other brand name gold jewelry, you'll get the best price selling privately or through a company that specializes in this type of product.

The value of a 14k gold necklace can range from about $1000 to $2000. Depending on the quality and size, it can be worth more. The weight of the gold metal and gemstones included in a 14K gold chain will determine the price. The amount of gold per ounce varies, but the price per gram remains the same.

You can test to see if your gold is real by putting a little bit of vinegar onto it. Put your piece of gold on a flat surface or hold it in your hand. Carefully pour some vinegar onto the gold, or use a dropper to put a few drops onto it. If the gold changes color, then it is not pure gold.

How do pawnshops appraise gold? ›

When a pawnbroker looks at gold or silver, these are the characteristics that they look for: Weight – price is mostly determined by weight. Purity – most gold jewelry has a “stamp” on it indicating how many karats it is: 10k, 14k, 24k.

Gold is the most counterfeited precious metal in the market, and that fact often places pawn shops under suspicion. In reality, state laws and community reputation make buying gold from a pawn shop less risky than you might think.

Pawn shops offer lower prices because they need to make a profit from reselling your gold if you default on the loan. Second, you'll have to pay interest and fees on top of the loan amount, which can add up quickly. Third, you risk losing your gold if you can't pay back the loan on time.

Generally, it's OK to buy from a pawn shop, and it's a great way to save quite a bit. However, make sure you are knowledgeable about the items that you are buying, and inspect them first for wear or damage. Some shops may even allow you to test items in-store before purchase, so it's always a good idea to ask.

Since the price of gold is currently $2,013/ounce (April 18, 2023), that would make the value of your ring $167. This means that: 14k gold wedding bands (2-10 grams) are worth between $83 and $414. 18k gold wedding bands (2-10 grams) are worth between $106 and $533.