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It’s hard to believe that I’ve been in the pawn shop industry for a quarter of a century, even though, as a third-generation pawnbroker, I’ve been in and around it my entire life.
For my family, buying and selling gold is not just a business; It’s in our blood.
I remember in the 90s the price of gold was so stable that we framed it in the shop so customers could see exactly why we would buy it – mum was buying 9ct gold at the time for £3.53 a gram.
But things began to change in 2005 and we entered a new era: the era of the “gold roller coaster.”
For almost two decades, the price of gold has followed a fairly volatile path with sharp declines and astonishing peaks that I find exhilarating. Since the early 2000s, the value of gold has increased exponentially.
Growth: Dan Hatfield says the price of gold has grown enormously since the early 2000s
To put this in context, in 2004, when I was a young moneylender, I bought a gold sovereign (with a purity of 22 carats and a weight of 7.98 grams) for £50. Today, that same sovereign would sell for £500. That’s a 900 percent increase, which, even after all this time, still blows my mind.
And this trend appears to be accelerating; In the last year alone, gold has skyrocketed almost 40 percent. I’ve never seen anything like it.
With the cost of living rising and this week’s Autumn Budget announcement, now could be a very lucrative time to sell if you’re lucky enough to have gold in your possession.
And I know first-hand that millions of Brits own gold. It is a metal that all areas of life have. From low-income people to multi-millionaires. It is a substance that seems to have a strong and ancient hold on us as a society, as a species.
But what is driving these massive increases in value? I think there are six main reasons:
1. Economic uncertainty: Gold is a “safe haven” in 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 spikes, the value of paper money decreases and gold becomes an attractive alternative as it maintains its value.
3. Weakening of currencies: In crises, investors choose gold in declining expired currencies, creating greater demand.
4. Lower interest rates: When rates fall, investors often turn to gold as it can offer higher returns.
Expert: Dan Hatfield has been in the pawn shop industry for 25 years
5. Geopolitical factors: Conflicts or tensions, whether in Europe or the Middle East, always reinforce the attractiveness of gold as a stable asset.
6. Central bank activity: Central banks around the world are buying gold in record quantities, driving up demand and the price.
So, considering all this, should you sell your gold or hold on to it?
Well, experts like me are divided: some predict that gold will continue its growth trajectory, while others are more cautious and believe 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, how much it’s worth, and where you should sell it.
It is surprising how much gold people unknowingly discard. I’ve had clients find valuable gold at car boot sales, charity shops and even bin sales. Often when someone dies, family members take items that could be of great value.
If you’re ready to take stock, look in all the drawers, boxes, and those odd places where small items like earrings can end up. It’s worth noting that white gold items can look like silver, so don’t throw away anything that looks tarnished; anything that looks like gold should be inspected more closely.
Test if it’s gold at home.
I have three simple tricks that can help you determine if your gold is real:
1. Magnet test: Real gold is not magnetic, so if the item sticks, it is probably not gold. However, please note that some items may contain other metal parts, such as clasps, that respond to magnets.
2. Scratch test on ceramic: Run the piece across an unglazed ceramic surface (such as the bottom of a coffee mug). Real gold leaves a golden streak; Fakes usually leave a black mark.
3. Vinegar test: Place a drop of vinegar on the item. If it tarnishes, it’s probably fake; Genuine gold will not change.
These tests are not definitive, but can help determine whether an item warrants further examination.
Not just for French fries: a drop of vinegar can help check whether a gold item is real or fake
Not all gold is equal
Another clear way to identify gold is if it has a hallmark.
In the United Kingdom, hallmarks have been a legal requirement since the 14th century. These marks identify the purity of the gold and are essential because different purities produce different values. Here’s a quick guide:
- 375 (9 carats) – the most common standard in the UK, at 37.5 per cent gold.
- 585 (14 ct): Contains 58.5 percent gold, commonly imported from countries such as America and southern Europe.
- 750 (18 karat): 75 percent gold, used for fine jewelry.
- 916 (22 carats): 91.6 percent gold, popular in Asian jewelry markets.
- 999 (24 carats): Almost pure gold, usually in bars or coins, also known as investment gold.
You can also find 8 carat gold (from Germany) or 15 carat gold, which used to be recognized in the UK.
This is not to say that those without stamps are not real, as there are international places where the stamp is not as common nor is it a legal requirement. Therefore, if you suspect an item is gold, have it checked before discarding it.
How much is it worth?
To calculate the value of your gold, download an app like Kitco, which offers up-to-the-minute market prices. The spot price quoted is for pure gold, so if you have a different carat you will need to calculate accordingly.
The easiest way to do this is to use the purity levels above and that percentage of the spot price is the figure you should aim for.
For example, at the time of writing, the spot price of pure gold was £69.10. If I have a 9ct gold ring with a purity of 37.5 per cent, the price per gram I’m looking for is £25.91.
Remember, buyers will deduct a margin for costs, so the amount you should expect to receive will be slightly less and prices vary depending on the supplier, so it’s worth calling.
Today I found deals on 9ct gold ranging from £15 to £23 per gram. There are no regulations or benchmarks for how much buyers pay.
Individuals and companies set their own prices, so comparing prices is not just a recommendation from me, but I insist on it. Yes, it takes a long time but it will pay off.
If you have identified gold and are interested in selling it, I chose different markets for different categories:
• Scrap Gold – Try a reputable lender or online gold buyer.
• Diamonds and Fancy Pieces: High-end jewelers often offer more for items set with diamonds.
• Vintage jewelry: Consider platforms like Etsy, which attract shoppers looking for unique items.
Sometimes gold is not only worth its intrinsic value. Your pieces might sell, and if so, use the gold prices you can now calculate as a basis for bartering with pawn shops and jewelers.
If a gem is worth more than the meltdown price, then you should receive more than the scrap value.
That is why it is vitally important to compare prices and ask the potential buyer what their intentions are in this regard.
If it’s going to be in the window, then you can start haggling. For some of your fancier items, it might also be worth taking them to a reputable auction house to get a price.
Painting a bigger, more complete picture regarding value and having multiple conversations will ensure you get the best price for your pieces.
Will you pay taxes if you sell gold?
Finally, don’t forget to check any tax obligations that may arise for you from the sale of gold. There has been a lot of talk in the media about HMRC’s new requirements for sales platforms to report user earnings.
If you are selling your possessions, capital gains tax applies after exceeding certain thresholds; This amount has increased after Thursday’s quote, so please take this cost into account when selling.
However, some items, such as the Royal Mint’s gold sovereigns, are exempt from tax. It is classified as legal tender and therefore does not suffer the wrath of capital gains tax.
If you decide to sell, it could be one of the best times to do so. If you choose to wait, you may be glad you did.
After all, the gold market is unpredictable. Regardless, we are currently living history as we all witness the great gold rush.
Who knows what the future holds for the yellow metal, but one thing is for sure: it won’t be boring!
Send 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 lender. It is an international specialist in antiques, jewelry, 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 seeking appraisals of its items and collections.
Please send as much information as possible, including photographs, to: editor@thisismoney.co.uk with the email subject: Modern treasures
We are only looking for post war items and may contact you for more information.
Dan will do his best to respond to your message in his biweekly column, but will not be able to respond to everyone or correspond privately with readers.
Nothing in your answers constitutes regulated financial advice. Posted questions are sometimes edited for brevity or other reasons.
As with everything, if you are looking to sell items and collections, it is wise to get a second and third opinion, not rely solely on Dan’s suggestions.
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