Selling gold jewellery can result in 75% loss

TRADING gold for cash can result in a loss of 75% in the value of jewellery.

Over the last year the number of companies offering cash for gold has ballooned, but experts have warned that more money can be made selling a TV in a yard sale than on old jewellery.

Mark O’Byrne, director with investment firm, GoldCore, said companies offering cash for gold offer anything between 55% to 72% of the value of the jewellery.

However, he warned that this is in addition to a massive loss already incurred by the jewellery owner if they decide to go ahead with the sale.

“Selling jewellery results in significant losses. The mark-ups by jewellers are very significantly over the actual gold price – by some 250% to 400%. Then there is VAT on top of this huge mark-up.

“When consumers go to sell, they are receiving less than 75% of the actual gold content or value,” he said.

Mr O’Byrne said, if a necklace is bought for €2,100 and the owner decides to sell it, they might get back around €440.

“At the same time, if you are in dire straits financially and have jewellery that has no sentimental or nostalgic value and need the money, it could be considered, but be sure and shop around,” he said.

Mr O’Byrne said, however, that he does not think firms offering cash for gold are “ripping people off” he just does not believe that selling gold in this way offers the best value.

“There are lots of ways to sell things these days, on eBay or at a yard sale,” he said.

Gold has been seen as an attractive investment in times of inflation and has risen 13.6% in value this year.

Sandra Close, an analyst at Surbiton Associates, said: “There are questions out there over the health of economies, where interest rates are going. All that encourages gold hoarding,” she said.

Gold reached an all-time record of $1,032 (€706) an ounce in March 2008.