WHODATHUNKIT?
The price of gold has now risen above $1000 per ounce. I wasn't sure that any other story could topple the 'blue topaz scare', but here we are.
We've gotten a ton of calls at The Karat Patch from folks wanting to sell their gold. The hardest part of these coversations is educating people on the content of pure gold in alloyed (14K, 18K, 10K, ect.) material, and the cost of getting the pure gold out of the alloyed material, and the insurance and shipping involved in all of that. Which is to say that by the time I tell them what their gold is worth ( less all of the other costs ) many of them decide to just keep their junk.
I called a major refiner the other day to see what was going on with the price they pay for 'scrap' gold in this kind of market. The person I spoke with said that as the MOUNTAIN of gold that they were currently sitting on gets taller, the price they pay for the gold gets smaller. I called another refiner and got (almost verbatim) the same story. Even if I sent them 999.9 fine gold coins, I might expect to get paid only 92% of that days spot gold price. There's a lesson in this: Don't wait for the price to peak before you sell out....it's better to sell out short of the peak and get the highest % paid of spot price that day. I actually sold both coin and scrap at $924.00, and was able to negotiate exact spot for the coin and 96% of spot price on the scrap, which was about 2% less than the advertised (with a disclaimer) pay-out. I can't get close to that today.
It's a bit scary to be in this uncharted water. I walk out into the showroom of The Karat Patch and wonder, "Will anyone buy this inventory at this price"? I wonder too about removing the stones and selling the gold for cash to buy fresh inventory when the price goes down. It's very difficult to make decisions about the future when the future is so uncertain.
Only time will tell what will become of all this. The housing market has tanked so, it might be time to sell all the gold out at a high price and buy real estate at a cheap price.
We've gotten a ton of calls at The Karat Patch from folks wanting to sell their gold. The hardest part of these coversations is educating people on the content of pure gold in alloyed (14K, 18K, 10K, ect.) material, and the cost of getting the pure gold out of the alloyed material, and the insurance and shipping involved in all of that. Which is to say that by the time I tell them what their gold is worth ( less all of the other costs ) many of them decide to just keep their junk.
I called a major refiner the other day to see what was going on with the price they pay for 'scrap' gold in this kind of market. The person I spoke with said that as the MOUNTAIN of gold that they were currently sitting on gets taller, the price they pay for the gold gets smaller. I called another refiner and got (almost verbatim) the same story. Even if I sent them 999.9 fine gold coins, I might expect to get paid only 92% of that days spot gold price. There's a lesson in this: Don't wait for the price to peak before you sell out....it's better to sell out short of the peak and get the highest % paid of spot price that day. I actually sold both coin and scrap at $924.00, and was able to negotiate exact spot for the coin and 96% of spot price on the scrap, which was about 2% less than the advertised (with a disclaimer) pay-out. I can't get close to that today.
It's a bit scary to be in this uncharted water. I walk out into the showroom of The Karat Patch and wonder, "Will anyone buy this inventory at this price"? I wonder too about removing the stones and selling the gold for cash to buy fresh inventory when the price goes down. It's very difficult to make decisions about the future when the future is so uncertain.
Only time will tell what will become of all this. The housing market has tanked so, it might be time to sell all the gold out at a high price and buy real estate at a cheap price.
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