Cash For Gold ‘Giveaway’ – As ‘Cash Strapped’ Europeans Sell Jewellery Amid Asian ‘Gold Rush’

Cash-strapped consumers are losing almost 80% of the value of their gold jewellery when they sell it to cash for gold companies.
In a major survey of cash for gold firms, it has been found that consumers are losing approximately 15% of the value of their gold when they sell their gold to get euros.
Desperate citizens are getting very poor prices when they are forced to sell their gold jewellery and similar figures and worse were seen in the UK, Portugal, Italy, Spain, Cyprus and Greece.
When the mark-up of jewellery retailers is also factored  in – which can range between 250-400% – this figure rises to approximately 80%, meaning that a ring originally bought for €1,000 will return only approximately €212.5 for a seller.

Silver Buffs Generic Add2
From Goldcore:

Today’s AM fix was USD 1,281.25, EUR 983.08 and GBP 850.65 per ounce.
Friday’s AM fix was USD 1,275.00, EUR 976.79 and GBP 842.70 per ounce.

Gold fell $0.90 or 0.07% on Friday and closed at $1,284.40/oz. Silver fell $0.29 or 1.44% and closed at $19.89.

 

Gold and silver were both up on the week at 5.14% and 5.46% respectively.

Gold inched up Monday after last week saw its largest percentage increase in over two years.  Ben Bernanke admitted last week that a highly accommodative monetary policy was needed for the foreseeable future, which boosted interest in gold as a hedge against inflation.

Cash-strapped consumers are losing almost 80% of the value of their gold jewellery when they sell it to cash for gold companies.

In a major survey of cash for gold firms, it has been found that consumers are losing approximately 15% of the value of their gold when they sell their gold to get euros.

Desperate citizens throughout the EU are getting very poor prices when they are forced to sell their gold jewellery and similar figures and worse were seen in the UK, Portugal, Italy, Spain, Cyprus and Greece.

When the mark-up of jewellery retailers is also factored  in – which can range between 250-400% – this figure rises to approximately 80%, meaning that a ring originally bought for €1,000 will return only approximately €212.5 for a seller.


Gold Prices/Fixes/Vols – (Bloomberg)

The survey, which was carried out by Goldcore, the precious metal specialists and gold bullion brokers, found that on average cash for gold merchants are paying approximately €10 per gramme of 9-carat gold, which is 37.5% pure.

“Consumers need to be careful when selling their gold jewellery for euros,” says Mark O’Byrne, Research Director of Goldcore. “While it may seem an attractive proposition in the short-term due to the current economic environment, when you factor in the original purchase price, you can see that  consumers are getting a very bad deal overall. There is also the fact that it is likely that gold prices will continue to rise in the long term.”

The current spot price for one troy ounce of 24-carat gold is €977 (as per July 12, 2013) and when readjusted at 37.5% for 9-carat gold, the price is €366.38 (the price for gold changes every day and to see current prices see www.gold.core.com ).  One troy ounce equals 31.1035 grammes, therefore  €10 X 31.1035 grams = €311.03 per 9-carat ounce (or €829.31 approx per 24-carat ounce).  Cash for gold merchants are therefore paying approximately 15% less than the market price for an ounce of 9-carat gold (€311.03 is 15% less than €366.38).

Most retailers of jewellery will have a 250-400% mark-up on the intrinsic gold value. For the purposes of the survey, the average mark-up taken was 300%. Therefore, if a 9 carat (9/24 or 37.5% pure) gold ring is purchased for €1,000, the value of the actual gold content contained in the ring would be close to €250, based on gold’s market value.  A cash for gold company will pay 15% less than its market value, giving the seller just €212.5 (a loss of approx 80% from €1,000).

“Our survey has shown that consumers are getting a raw deal from the cash for gold sector,” adds Mr O’Byrne.

“Selling gold jewellery in this manner is a classic case of buying high and selling very low – akin to ‘selling the family silver’ for very poor prices.  The public is being misled that now is a good time to sell gold. At nearly $1,300 and €1,000 per ounce today, gold is well below its record high of $2,400 per ounce in 1980 in real terms when adjusted for inflation,” he continued.


Gold Support & Resistance Chart – (GoldCore)

People in the EU should try and hold onto their gold as it will protect them from bail-ins and currency crisis as physical gold has done throughout history.

Today the smart money in the world is buying gold including people in China, India and Asia who are buying gold jewellery, coins and bars in what is being termed a modern ‘gold rush’.

Meanwhile struggling working and middle class Europeans are selling their gold and getting a very raw deal in the process.

Gold is the last thing people should sell and should only be a very last resort as it is financial insurance which will protect from systemic and currency crises. In time, people will scratch their heads at “cash for gold” schemes and wonder why harder questions were not asked about this peculiar western phenomenon of recent years.

Figures for The Great Gold Giveaway graphic:
Loss for consumer overall:
* 80%

Market price per troy ounce:
* €977 per 24-carat oz
* €366 per 9-carat oz (37.5% purity)

Cash for gold merchant pays:
* €10 per gramme of 9-carat gold (37.5% pure)

One troy ounce = 31.1035 grammes,
* €10 X 31.1035 grams = €311.03 per 9-carat ounce (15% less than the market price).

Breakdown of ring purchased for €1,000
* 300% – jewellers mark-up.
* €250 – intrinsic value of the gold
* €212.5 – price cash for gold merchant will pay.
Prices valid as per July 12, 2013.

NEWS
Cash for Gold Is a Bad Deal, Warns Broker – The Sunday Business Post

Gold extends gains on stimulus hopes
– Reuters

Gold Extends Best Week Since 2011 as Stimulus Seen Sustained – Bloomberg

Hedge Funds Bought Gold in Biggest Rally Since 2011 – Bloomberg

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Comments

  1. JUST LIKE THAT HERE!!! 

    • IN REALITY, it is much worse here. I took in an ASE (as bait, don’t worry SD, I am not “mad”)
      and asked to get a quote on it. No “jewellery losses” on it, but all they offered was ~55-60% of SPOT! 
      I asked for a full explanation, because they say the going rate is 70% of Spot. Well, they take out 
      5% refiners fees (which is HIGH!) and then they take out 10% for the mall (BS, cuz they pay booth rental!)
      and THEN they hit you AGAIN with 70% of the new 85 cents on the dollar reduced price! 
      Major rip-off! 
      Here’s what they need: 

  2. Funny how things rhyme, isn’t it?
     
    Consumers are losing approximately 15% of their dollar when buying groceries, when compared to last year.
    ————————————
    “…it has been found that consumers are losing approximately 15% of the value of their gold…

  3. Here’s one of their other ploys when dealing with unmarked gold.  I had a friend which had some gold from dentures and despite my advice took it to one of these dealers.  They promised to melt it down and separate and pay him on the actual gold recovered.  When he returned a few days later sure enough they had a small gold button which they claimed was recovered from these dentures.
    Denture gold is a fairly standard material and easy to find gold content on the internet so anyone can figure out to a reasonable degree the amount gold it contains.  I estimate he got less than 1/3 the value of actual gold contained. 

  4. These situations are just one additional segment of the generation-long plan to stripped real money and real wealth from the people.  The people are hammered on the anvils of debt and FIAT, impoverished by their loyalty to a false currency system and once that system assumes the glide ratio of a lead brick, they are forced to cough up their precious metals for pennies on the dollar.  The pillage of trillions in wealth accumulated by the people over the decades and centuries will be complete when the people are destitute, homeless and starving in the streets. The ghouls will have won.  It’s happened dozens of times in the European world over the last 1,000 years. Feudalism never died, it just waited patiently for the right opportunity to strike.  The peasants will have to rise up with pitchforks, scythes and cudgels to take back their heritage and birthrights.  It will be bloody.

  5. Interesting Bloomberg news article about the Vietnamese & Indian goverment’s efforts to discourage citizens from owning Gold.
    It seems their currencies are sliding against the $USD, so the .gov’s idea of a remedy is to induce savers to convert their Gold into cash, which of course the banks will hold for them.
     
    Anybody who believes it is only the US .gov that wants to separate people from their hard assets should read this.
     
    Linkey:
    http://www.bloomberg.com/news/2013-07-14/granny-s-gold-bars-are-key-to-vietnam-push-to-boost-dong.html
     

    • Globallly there are still the extremely wealthy who are concentrating more and more wealth into their hands. So it is happening worldwide not just here or EU

  6. …You know, I had an automobile patent back in 2001. A GREAT idea, and began marketing it out to producers.  One company called and had the nerve to offer to do complete marketing overseas and locally, with an impressive success rate; they wanted 78% of whatever royalty deal I struck. (Which is typically 5-7% gross sales at best).  I told him first I created, and manufactured the prototype, and no one was going to sweep 50%+ of MY creation out from under me, I don’t care how much he spends marketing. He proceded to apply scare tactics, telling my stats on the odds of me sucessfully selling it without professional marketing. To which I responded: I’ll die poor with my invention before I allow someone to take majority control over it. If you insist on making the lions share of the profits, off of MY idea, then neither of us will make a dime off of it! 
     
    Case in point I’ll die with my silver to pass secretly to future generations before I get Muscled into selling cheap. I’ve already passed on at least 3 fortunes that I can think of due to ethics… I’ll never break! I’m built of stubborn metal.

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