In many states, gold buying parties are illegal if the purchaser does not have the proper license, perform required paper work or hold purchased gold for a require waiting period for police checks. Maryland, Washington, D.C. and Virginia require a secondhand, precious metal purchasing license. Maryland requires paperwork which must be sent daily to the county police and an 18 day holding period during which the purchased gold cannot be resold, melted or changed in form.
A sweep by Anne Arundel County Police, MD on December 10, 2008 cited 18 jewelers for not complying with licensing, record keeping and holding period offenses as reported in “Maryland Jewelers Violate Metal Purchasing Law”, National Jewelers Network, January 14, 2009 . Only two jewelers in the sweep were found to be fully in compliance with Maryland laws.
If your state has laws regulating secondhand gold purchasing you may be selling your gold to an illegal entity.
If you are invited to a gold selling party your local police office should be consulted to ensure that this is a legal and valid enterprise. Each state has its own laws about resale buyers of gold and other precious metals. Find out if gold parties are legal in your state for your own protection. Unregulated gold buying is likely to attract people selling stolen items. The waiting period allows the police to determine if these items are stolen or otherwise obtained by illegal means.
Usually the host or hostess of the gold party invites a gold buyer from a firm to come to their house. There are many listed on the internet. This person may or may not be legally licensed. The party hosts usually get 10% of the gross purchase amount. The people who are invited to the party may get a check for about 40% of the gold value of items they have to sell. The amount they get is based on gold karat and weight. 18 karat gold contains almost twice the amount of gold as 10 karat gold and therefore the price for a gram of 18K is almost double the price for 10K. All stones are removed by the buyer. You will not get paid for the weight of the stones in your jewelry. Sometimes the stones are smashed with a hammer or removed with pliers or a knife. This often includes small diamonds. Do not sell diamond rings even at a legal gold party.
The party atmosphere makes sellers feel they are getting a great deal for their gold. Gold has been trading for around $900 to $1,000 per troy ounce. Even a small sandwich bag full of gold jewelry can be worth well over $1,000. However 40% is much lower than you can get from a legitimate gold buying store which may pay you up to 70% to 80%. You may feel good about your sale, however, you may have lost half the payment obtainable from a legitimate dealer.
Find out if you are selling your gold to a legitimate, licensed dealer. You will not only be complying with the law but will make more money as well.
