It’s hard to believe I’ve been in the pawnbroking industry for a quarter of a century now, though as a third-generation pawnbroker, I’ve been in and around it all my life.
For my family, gold buying and selling isn’t just a business; it’s in our blood.
I remember in the 90s, the price for gold was so stable, that we framed it in the shop so that customers could see exactly what we would buy it for – Mum would buy 9-carat gold at this time for £3.53 per gram.
But things began to change in 2005, and we entered a new era—the era of the ‘gold rollercoaster’.
For nearly two decades the price of gold has been on quite a volatile journey with sharp dips and staggering peaks which I find exhilarating. Since the early noughties the value of gold has increased exponentially.
Growth: Dan Hatfield says the price of gold has grown massively since the early 2000s
To put this into context, in 2004, as a young pawnbroker, I would buy a gold sovereign (with a 22-carat purity and weighing 7.98 grams) for £50. Today, that same sovereign would sell for £500. That’s a 900 per cent increase, which, even after all this time, still blows my mind.
And this trend seems to be accelerating; over the past year alone, gold has shot up by nearly 40 per cent. I’ve never seen anything quite like it.
With the cost of living rising and this week’s Autumn Budget announcement, now could be a very lucrative time to sell up if you’re lucky enough to have gold in your possession.
And I know first hand that millions of Britons do have gold. It’s a metal that all walks of life have. From those on low incomes to Billionaires. It’s a substance that seems to have a strong, ancient hold on us as a society, as a species.
But what’s driving these massive increases in value? I think there are six main reasons:
1. Economic uncertainty: Gold is a ‘safe haven’ during uncertain times, and the last two decades have been turbulent. When challenges arise, investors turn to gold to protect their wealth.
2. Inflation: When inflation soars, the value of paper money decreases, and gold becomes an attractive alternative, as it holds its value.
3. Weakening currencies: In downturns, investors choose gold overdue declining currencies, driving a higher demand.
4. Lower interest rates: When rates drop, investors often switch to gold, as it can offer higher returns.
Expert: Dan Hatfield has been in the pawnbroking industry for 25 years
5. Geopolitical factors: Conflict or tension, be it in Europe or the Middle East, always bolsters gold’s appeal as a stable asset.
6. Central bank activity: Central banks globally are buying gold in record numbers, pushing up demand and the price.
So, with all this considered, should you sell your gold or hold onto it?
Well, experts like me are divided – some predict that gold will continue its growth trajectory whilst others are more cautious siting that markets can change unexpectedly. I can’t give you a definitive answer but if selling suits your financial circumstances, I can tell you how to identify what you have, what it’s worth and where you should sell it.
Its astounding how much gold people unknowingly discard. I’ve had customers find valuable gold at car boot sales, charity shops – even skips. Often, when someone passes away, family members clear out items that could have serious value.
If you’re ready to take stock, search all drawers, boxes, and those odd places where small items like earrings might end up. It’s worth noting that white gold items can look like silver, so don’t throw anything away that seems tarnished; anything that appears gold should get a closer inspection.
Test if it’s gold at home
I’ve got three simple hacks that can help you ascertain if your gold is real:
1. Magnet test: Real gold isn’t magnetic, so if the item sticks, it’s likely not gold. Be aware, though, that some items may contain other metal parts, like clasps, that respond to magnets.
2. Scratch test on ceramic: Run the piece across an unglazed ceramic surface (like the underside of a coffee cup). Real gold leaves a gold streak; fakes will often leave a black mark.
3. Vinegar test: Place a drop of vinegar on the item. If it tarnishes, it’s likely fake; genuine gold won’t change.
These tests aren’t definitive but can help determine if an item warrants further examination.
Not just for chips: A drop of vinegar can help test if a gold item is real, or fake
Not all gold is created equal
Another clear way to identify gold is if it has a hallmark.
In the UK, hallmarks have been legally required since the 14th Century. These marks identify the purity of gold and are essential because different purities yield different values. Here’s a quick guide:
- 375 (9ct): The most common UK standard, at 37.5 per cent gold.
- 585 (14ct): Contains 58.5 per cent gold, commonly imported from the likes of America and Southern Europe.
- 750 (18ct): 75 per cent gold, used for fine jewellery.
- 916 (22ct): 91.6 per cent gold, popular in Asian jewellery markets.
- 999 (24ct): Nearly pure gold, typically in bars or coins, otherwise known as investment gold.
You may also encounter 8ct gold (from Germany) or 15ct, which used to be recognised in the UK.
This isn’t to say that those without hallmarks aren’t real as there are international locations where hallmarking isn’t as common, or a legal requirement. So, if you suspect an item is gold, have it checked before dismissing it.
What’s it worth?
To work out the value of your gold, download an app like Kitco, which gives up-to-the-minute market prices. The spot price listed is for pure gold, so if you have a different carat, you’ll need to calculate accordingly.
The easiest way to do this is use the purity levels above and that percentage of the spot price, is the figure you should be aiming towards.
For example, at the time of writing this the spot price for pure gold was £69.10. If I have a 9ct gold ring which is 37.5 per cent purity, the price per gram I am looking for is £25.91.
Do remember, buyers will deduct a margin for costs, so the amount you should expect to receive will be slightly lower and prices do vary by vendor, so it’s worth calling around.
Today, I found offers for 9ct gold ranging from £15 to £23 per gram. There are no regulations or bench marks as to how much buyers pay.
Individuals and companies set their own prices so shopping around isn’t just recommended by me, I insist upon it. Yes it’s time consuming but it will pay off.
If you have identified gold and are keen to sell it, I chose different markets for different categories:
• Scrap gold: Try a reputable pawnbroker or online gold buyer.
• Diamond and fancy pieces: High-end jewellers often offer more for diamond-set-items.
• Vintage jewellery: Consider platforms like Etsy, which attract buyers looking for unique items.
Sometimes gold isn’t just worth it’s intrinsic value. It could be that your pieces will be sold on and if so use the gold prices you can now work out as a base line to barter with Pawnbrokers and jewellers.
If a piece of jewellery is worth more than the melt price then you should be receiving more than the scrap value.
That’s why it’s vitally important to shop around and ask the potential buyer what their intentions are for it.
If it’s going in the shop window then you can start to barter. For some of your fancier items it could be worth also taking them down to a reputable auction house to get a price on them as well.
Painting a bigger, fuller picture value-wise and having multiple conversations will ensure you get the best price for your pieces.
Will you be taxed if you sell gold?
Finally, don’t forget to check any tax liabilities selling gold may incur for you. There’s been plenty of media talk about HMRC’s new requirements for selling platforms to report users’ earnings.
If you’re selling your possessions, capital gains tax applies after exceeding certain thresholds, this amount has increased after Thursdays budget so factor this cost in when you do sell.
Some items, though, like Royal Mint gold sovereigns, are tax-exempt. This is classed as legal tender and so does not feel the wrath of capital gains tax.
If you do decide to sell, it might be one of the best times to do so. If you choose to hold, it’s possible you’ll be glad you did.
The gold market, after all, is nothing if not unpredictable. Regardless we are currently living though history as we all get to witness the great Gold rush.
Who knows what the future holds for the yellow metal, but one things for certain, it’s not going to be boring!
Send in your Modern Treasures
Dan Hatfield: Our columnist is ready to value your Modern Treasure
Dan Hatfield is This Morning’s money-making expert and resident pawnbroker. He is an international specialist in antiques, jewellery, diamonds and collectibles.
Dan’s first non-fiction book, Money Maker: Unlock Your Money Making Potential (£16.99, published by Hodder Catalyst) is available now.
This is Money’s Modern Treasures column is after your items and collections for valuations.
Please send in as much information as possible, including photographs, to: [email protected] with the email subject line: Modern Treasures
We’re after post-War items only please and we may contact you for further information.
Dan will do his best to reply to your message in his bi-weekly column, but he won’t be able to answer everyone or correspond privately with readers.
Nothing in his replies constitutes regulated financial advice. Published questions are sometimes edited for brevity or other reasons.
As with anything, if you are looking to sell items and collections, it is wise to get a second and third opinion – not just rely on Dan’s suggestions.
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.