When people speak of buying private gold, it has a vaguely sinister sound, but there's nothing shady about it. They're buying gold from a private source, a person, pawnshop or at an estate sale, rather than from the government -- the U.S. Mint, for example -- in hopes of a profit. When you follow their example, you can do a few things to make sure you're getting what you pay for
After the sharp gold price increases that began in January, 2009, it's likely even the most stately dowagers sold off some excess gold. Most of the gold sold to dealers is processed within 24 hours and returns to the market as bullion coins or bars -- the gold bars that come in weights ranging from 1 gram to 2 or more kilograms. These coins and bars are 99.9 percent gold -- marked ".999 fine." They are alloyed with another metal only because gold is a soft metal. The 0.01 percent base metal helps them maintain their processed shape and design.
Gold in Carats
Pure gold is 24-carat gold. If you're buying gold jewelry, the gold you're looking at is 14-carat gold is 14/24 gold. Translating that to a percentage to an understandable and marketable number requires you to have the accurate weight of the gold object and know if the object is 1.2-, 14-, 18 - or 24-carat gold. If, through testing or a hallmark, you've determined the gold is 14-carat, divide 14 by 24. The result, 0.5833, is the percentage of the object that's actually gold. This means that 1 ounce of 14-carat gold equals 0.5833 ounce of pure, 24-carat gold.
The Acid Test
A gold testing kit's nitric acid is used to determine whether or not something is gold, gold-plate, gold filled -- by definition, gold-filled goods are 5 percent, or 1.2 carat, gold. Gently scratch the gold object on the stone in the kit, put a drop of nitric acid on the gold mark left on the stone. If the gold suddenly turns bright green, it's gold plate. Gold-filled objects show a pink foam. If any other color appears, rub the kit's comparison test needles on the stone near the gold streak already on the stone. Drop nitric acid on the streaks left by the comparison needles. The test needle streak that most closely matches the color of the original gold streak, after the acid test, is from the needle of the appropriate gold content.
Try to find a source with a good reputation. Pawn shops may move gold quickly, but if you're lucky enough to be there when they purchase an item, you can offer them a quick turnaround with, hopefully, a profit for yourself. Banks, while acting as an intermediary for the government, are still the most trustworthy private sellers. Most sellers and auctioneers at estate sales or public auctions are savvy enough to sell gold items, or even items that look like gold, as separate auction lots. Online sellers, such as those at popular Internet auction sites, may have a long reputation at the site -- check it. The site itself may offer some form of protection to buyers who are defrauded, as well. If you can, cultivate a good, long-term relationship with your source, whatever its form.
Will Charpentier is a writer who specializes in boating and maritime subjects. A retired ship captain, Charpentier holds a doctorate in applied ocean science and engineering. He is also a certified marine technician and the author of a popular text on writing local history.