Have you ever had a job that was weird, as in the kind of job most people don’t have experience working? The kind of job you don’t stay long at because it is so weird. Well, working as a gold buyer or “precious metals” buyer aka a glorified pawn broker is exactly that kind of job. Most people have no experience in that world. Every shift, it felt like a sketchy business to be in. Every shift, I’d wonder if I’m violating some rule or law. The best part of the job is that every day, without fail, I’d hear at least one interesting story. In fact, I have more stories from my short time as a gold buyer than I have in ten years working retail. There are two good reasons I’d recommend working as a gold buyer, one is for the stories, and two is learn about precious metal investing.
Once upon a time, I was hired to work as a gold buyer. I left within months of starting, not because the job was difficult, but because I felt uncomfortable for reasons. The work is straight forward and easily described as the opposite of retail. Customers bring stuff in for the gold buyer to determine if it’s gold, silver, platinum, palladium, copper, brass, or nickel. The gold buyer uses the daily market prices to determine the dollar value and gives a quote to the customer. The customer decides whether the buyer offered a good price or not. Sometimes, buyers will not sell to you , but take your quote to another business who will offer more money. In addition to walk-in customers, we had customers ship items from other countries for testing.
When I was hired, I was told the average customer is a woman in her mid-thirties. That was true in my experience. Most customers either brought in old/broken jewelry, old silverware items, coins, or bullion. It was common for customers to have a recently deceased loved one, or a recent breakup of a relationship. Being a gold buyer requires some degree of sensitivity because you often have customers who are still hurting, and in some cases, desperate for money. I’ve had men on the verge of tears when I told them the real value of their engagement ring. You learn something new each shift, whether from the customers or co-workers.
You learn to never buy diamonds, only bullion. The value of bullion is easy to find; you look up it’s market price. Gold buyers will likely pay you 98% of the day’s market price for bullion. The value of diamonds is a mystery and you will be low-balled if you try to sell it to a gold buyer. You learn nobody knows the real value of diamonds and there is a huuuge mark-up on diamonds. I’ve even seen customers talked into keeping their diamond.
You learn to never buy shaped diamonds, only buy round if you really, really want diamonds in your life. Shaped diamonds have less value to a gold buyer. Like, a customer with 2 one carat diamonds, one round and one shaped, will be offered more money for the round one.
You learn it’s better to buy gold jewelry in Saudi Arabia or in the UAE (United Arab Emirates) than here. It’s because they are more likely to sell jewelry at market prices, as in there’s no mark-up added.
You learn diamonds are not rare; they are controlled and De Beers used to have a monopoly over the diamond business.
You learn jewelry is not an investment, only bullion is like investing (buy low, sell high). There are 2 reasons. One, jewelry has a mark-up just like any other product you buy from a store. Two, selling jewelry to a gold buyer means you will be offered something around 75-76% of it’s market value. This is worse than the 98% you could have been offered if you had bullion instead of jewelry. Gold buyers treat anything other than bullion and collectible coins as scrap, this includes fancy jewelry. You learn never turn bullion into jewelry or anything else because it will decrease it’s value when selling to a gold buyer. If you have bullion that you turned into, say, a necklace, you will not get paid bullion prices. The gold buyer will offer you scrap value, which is around 75-76% of it’s market price.
You learn many people get scammed because they don’t know much about precious metals or the jewelry business. You learn it can take someone a minimum of ten years post divorce before they are ready to sell their wedding jewelry. You learn there are woman working around the elderly as an HCA or a nurse or housekeeper who are prolific thieves. You learn that men (or whoever buys jewelry) are more disappointed when you tell them their jewelry is low in value; women (or whoever receiver jewelry) care less about the value.
You learn some people are A-OK walking around with $30,000 worth of gold bars on them, while other people are scared they have $4000 worth of gold bars on them.
You learn 10 karat gold can look like anything metal, including dark grayish black like cast iron. You learn even electrical wire can be precious metal. I’ve bought platinum wire from customers connected to the electrical business. You learn that just because a thing could be valuable even though it does not look valuable. Some people melt gold and other metals because they are crafters.
You learn how the other gold buying companies cheat customers. Always weigh the items you want to sell before you visit a gold buyer. You learn what a pile of $26,000 cash versus platinum bullion wafers looks like while you make barely above minimum wage. You learn to ask gold buyers and pawn shops if they have the same $40,000 scanner that the mint uses. Before you make a trip to your local gold buyer, phone them and ask if they have that scanner.
The scanner makes gold buying easier because it’s more accurate and faster than other methods. We mainly use it to test the element content of metal items. Diamonds are not scanned. Though gold buyers and pawn shops both advertise they buy diamonds, they can train their buyers to get the diamonds without paying the customer. They train buyers to not draw attention to the stones and only talk about the stones when the customer directly asks you.
Make no mistake, only diamonds matter (and not even that much), other gemstones will not be bought. In fact, the other gemstones will likely end up damaged and tossed into a jar to be forgotten. Diamonds of at least 1 carat are the type gold buyers are more interested in. The price a gold buyer will offer you will be low because that diamond will be sold to a jeweler who will turn it into a piece of jewelry and then sell it at a marked up price.
So, my TL; DR advice is: never buy diamonds, only bullion, and always ask pawnbrokers and gold/precious metal buyers if they have the $40,000 scanner that the mint uses.