Many companies that offer money for gold do so to resell it with a profit margin, meaning that the price at which they offer to buy their gold will be much lower. These stores, like pawn shops that operate on a buy-and-sell model, need to offer less than what gold is worth to make a profit. Take the gold to a jeweler or coin dealer who buys scrap metal to convert it into paper money. A commission will be charged for selling your gold, generally between 10 and 20 percent of the market value.
Get in touch with several buyers to determine the best price you can get for your gold. The largest funds in this sector include the VanEck Vectors Gold Miners (GDX) ETF, the VanEck Vectors Junior Gold Miners (GDXJ) ETF and the iShares MSCI Global Gold Miners (RING) ETF. If gold moves against you, you will be forced to contribute significant sums of money to maintain the contract (called margin) or the broker will close the position and you will suffer losses. Three of the largest ETFs include SPDR Gold Shares (GLD), iShares Gold Trust (IAU) and the Aberdeen Standard Physical Gold Shares (SGOL) ETF.
Investing in gold isn't for everyone, and some investors continue to bet on companies with cash flow instead of relying on someone else to pay more for the shiny metal. Calculate the market value of your gold by multiplying each ounce of 24-carat gold by the market value of the day's gold. Gold futures are a good way to speculate on the rise (or fall) in the price of gold, and you could even accept the physical delivery of gold if you wish, although physical delivery is not what motivates speculators. Discount the purity of gold from landlords based on the percentage of gold by weight and multiply the amount discounted by the market value.
This contrasts with the owners of a business (such as a gold mining company), in which the company can produce more gold and therefore make more profits, increasing investment in that business. With inflation rising and the stock market price well below its highs, some investors are looking for a safe asset that has a proven record of earning, and that's gold. That's one of the reasons why legendary investors, such as Warren Buffett, warn against investing in gold and instead advocate buying companies with cash flow. Therefore, gold ETFs are more liquid than physical gold and you can trade them from the comfort of your home.
Investors like gold for many reasons, and it has attributes that make this commodity a good counterpoint to traditional securities, such as stocks and bonds. Have your gold jewelry appraised at its value before selling it at the price of scrap gold in case labor or antiquity increases in value. On the contrary, the owners of a business, such as a gold miner, can benefit not only from the increase in the price of gold, but also from the company's increase in profits. If you don't want to have the trouble of having physical gold or dealing with the fast pace and margin requirements of the futures market, a good alternative is to buy an exchange-traded fund (ETF) that tracks the commodity.
Separate the known purity even further and classify gold according to the carat level, from 9-carat gold containing 375 parts of gold per 1000 to 24-karat gold, which is 999,999 parts per 1000 pure gold.