Buying and Selling Scrap Silver and Gold

When Selling Scrap Silver Keep This in Mind..
At the time of writing this blog entry there are three prices of sterling (925) silver that the calculators are showing (all in troy oz) today's price $43.74 http://www.silverperounce.com/ taken from eBay's selling price, $43.71 market's spot price (see below for spot price defintion) and scrap price $39.76 both found on http://www.silverrecyclers.com/Calculators/ster_calculator.aspx . 

Now scrap prices vary according to buyers. I have a very savvy vintage jewelry seller friend that swears on selling scrap on eBay. If you take the today's price $43.74 (first calculator price partly derived from eBay selling price) and sell your scrap on eBay using that as your starting price for an auction then you would be getting (using the eBay calculator http://www.rolbe.com/ebay.htm) you would make $38.23 (after fees). So the eBay auction profit is 87% of today's spot price. Whereas the scrap price is 92% of the spot price.

I have used two scrap refineries that I have mailed scrap. (make sure the refinery is a member of the Better Business Bureau http://www.bbb.org/ and has a good rating). If stones are in the jewelry, then refineries melt the metal jewelry with stones but subtract an estimated weight. Or you can remove your own stones. 
Here are my finding from two refineries: Midwest Refineries
http://midwestrefineries.com/ pays 90% of spot price (but you have to pay mailing to refinery) which makes it approx. 89% of spot price. Garfield Refining Company http://www.garfieldrefining.com/ will  pay for your shipping but pays 70% of spot (sent email today and said it's paying $30.61 /OzT) . Garfield will take weighted silver where most refineries do not take weighted silver . Midwest Refinery is the clear winner.  

When Buying Scrap Silver From eBay...be very aware of the following...
from Ebay Guides written in 2007.

You must KNOW EXACTLY what you are bidding on. Auctions listing Precious Metals for sale as "SCRAP" will include the weight 99% of the time. They list most weights in grams. But you will also see listings in ounces (oz), postal ounces, pounds (lb.), or even grains.
1. You need to convert this to an amount that easy for you to calculate the ACTUAL Scrap Value.
2. You need to know the ACTUAL % of content of Precious Metals.
3. You need the current spot of value of the precious metal.

I like to convert all of my weights to "TROY" ounces because the "Spot" amount on Precious Metals is based on weight in troy ounces. If an auction lists a weight in ounces ALWAYS assume it is NOT troy ounces.

If you search ebay for scrap silver you will see many listings with weights in ounces. If you assume it is troy you will come up short by about 9%. It is an advantage to the seller that you will think that this is the amount of silver or gold that they have for sale. They boost the perceived value by 9% when they list it this way.

Click here for an online converter from grams to troy oz to oz.

Precious Metals %'s of Content

Silver. Most silver for sale on Ebay is STERLING (.925) 92.5%, 925/1000. There are others such as "Coin" silver 90% (US pre 65 silver coins), 800 or 80%, 835, or 83.5% and a very few items that are PURE SILVER .999 or 99.9%. Just so you understand PURE silver is always listed as .999
Gold. The most common gold is the USA is 14k. PURE Gold is 24k. Gold content is measured in "k". To get 14k they mix 14 parts of PURE gold with 10 parts other metals, as copper.
9k. 37.5% pure gold (Typically found in Europe)
10k. 41.66% pure gold
12k. Probably only gold plated. .001% or less gold
14k. 58.33% pure gold
16k. 66.66% Pure gold (Old Dental Gold, always treat this gold as 14k)
18k. 75% pure gold
22k. 91.66% Pure gold (Asian and Middle Eastern) Some of this 22k gold is marked .999 but will not test as 24k.
24k. 100% Pure gold (Only in certified) if not certified do not buy as 24k.

Precious Metals spot price

This price changes while the markets are open. You will need to locate you a website that you can check. Just search "Precious Metals spot price". I like kitco's
Today gold spot closed at $670.90 and silver $13.06 per TROY ounce
So lets bring everything together,
This is a current listing, 16k 14k 10k scrap lot 20.1 GMS?? 16K dental gold. 3.0 grams of 14K & 1.9 grams 10K for a total of 20.1 grams.
15.2 grams of 16k = 15.2 / 31.103 = .488 t.oz (14k) x .583 = .285 t.oz. Pure gold
3. Grams of 14k = 3 / 31.103 = .096 t.oz, (14k) x .583 = .056 t.oz. Pure gold
1.9 grams of 10k = 1.9 / 31.103 = .061 t.oz. (10k) X .416 = .025 t.oz. Pure gold
Now to total, .285 + .056 + .025 = .366 troy ounces of pure gold (spot gold)

.366 x $670.90 = $245.55 "scrap value"

This would be "scrap value", but this is not what you will get for it when you sell it for scrap to a smelter.
I sold silver on Friday 4-20-2007 at my smelter and the spot at time of sale was $13.72t.oz.
For marked .900 silver plates and was paid $11.10 per troy ounce
For marked Sterling hollowware and flat ware I was paid $11.24 per troy ounce
For Sterling marked jewelry I was paid $10.98 per troy ounce.
So this is what I consider "scrap value" and it is less than the above-calculated amount. I will explain, smelters grade the silver for potential/past average percent values. For Sterling we used a value of .925 but they use .91, this is based on there past purchases and averaged. When I sold Sterling in the 80's they used .925, but now they have allot more history to know that when they melt Sterling it will only assay to about .91. They also know that Sterling jewelry typically is of lower quality and only value it at .977 of the .91. Now if I sell Sterling coins, like Franklin Mint, I will get .925 and not the .91 because the smelter stated that Franklin Mint and other coin makers use virgin silver. This would mean that not all Sterling is the same? Again you have to know what you are bidding on. Also the smelter and all buyers will only pay you a certain amount of "spot" mine pays 90% for silver and on gold and Platinum 97% (This is there margin)

More information about gold and silver used in jewelry:

Sterling Silver -Silver Content- Cliff Notes
Gold Info In a Nut Shell Gold Info In a Nut Shell

 

Wiki"s Spot Price Definition: Depending on the item being traded, spot prices can indicate market expectations of future price movements in different ways. For a security or non-perishable commodity (e.g. silver), the spot price reflects market expectations of future price movements.