How to Profit Big Buying and Selling Gold and Silver Part One
Many people have asked me how I got started buying gold and silver. I know a lot of people who would like to own gold and silver as hedge against inflation and as a way of making some money. With the prices of gold and silver continuing to rise, it is becoming more and more costly to start investing in precious metals. The method you are going to read about, literally anyone can use to start buying and selling precious metals, starting with pocket change.
The following is part one of an ongoing series on how to buy gold and silver for pennies on the dollar and then turn around and sell it for close to spot metal price and make a handsome profit.
I also want to stress that you may want to keep much of the gold and silver you find using my method as a hedge against economic and political collapse. A collapse that I see as being a near certainty.
Ok on to Part One.
Know What You Are Buying and Where to Buy it.
I am sure you have seen the ads on TV and in newspapers. We Buy Gold! Sell your junk gold and silver for big money! Well I am here to tell you that you can make big money but you don’t have to sell your ‘junk’ gold and silver to one of those We Buy Gold companies. Here are some facts about gold and silver and those companies that pay you for your scrap gold and silver and jewelry. First of all you do not get anything close to “spot” price. What is spot price you might ask? Well spot price is the price that is set by the commodities market. If you look in the newspaper financial section or you go online and type in spot metal price into Google you will be able to see what the daily spot metal price is. At the time of this writing as of August 2011, silver is hovering around $40 per ounce and gold is around $1600 per once. Now getting back to what you can get paid from a gold and silver buyer. Typically these companies pay you anywhere from 75-85% of spot price depending on the quantity of metal you are selling. Also how much they pay you will depend on how much pure gold or silver makes up what you are selling. For instance you may be familiar that gold purity is rated in karats. Gold is usually produce in 10, 14, 18, 22 and 24 Karats. Now, what exactly does that mean? Well each of those numbers tell you how much the metal that makes up the piece is actually gold. Each number represents a percentage of gold.
8K is 333 (33.3%)
10K is 416 or 417 (41.6 or 41.7%)
14K is 583 or 585 (58.3 or 58.5%)
18K is 750 (75%)
22K is 916 (91.6%)
Another fact about gold you will want to be aware of is the difference between solid gold, gold plating, gold dipped and gold electroplating. Anything other than solid gold is going to be some kind of plating or coating over a base metal, now that doesn’t mean that you still can’t make some money from a plated piece of jewelry or other gold plated object it just means that what you get paid will be based on the weight and purity of the gold plating or cladding as it is sometimes known as. But don’t expect more than a couple of bucks at most per piece, unless of course gold shoots up over $5000 per once. Then anything with even a trace of gold will have value.
Now silver is a slightly different story. Silver is rated in fineness. For instance pure silver is rated as .999 pure. Meaning that only .001 percent of the metal is something other than silver. Now you may be familiar with sterling silver. Sterling silver is not pure silver. Sterling silver is made not to tarnish like pure silver. In order to prevent tarnishing, silver is mixed with another metal bringing down the purity to about .923 silver. Again this doesn’t mean you can’t make money from sterling silver, you just need to be aware that you will be paid less for the same weight of sterling than that of pure silver.
Now you may be wondering how you can make BIG money buying and selling gold and silver. Well the secret is not really a secret at all, or more precisely it isn’t a secret that is limited to selling precious metals. In fact it is the secret to making money selling anything. Simply it is to buy low and sell high. When dealing with precious metals it may seem that there is little opportunity to buy gold and silver for very low and as I stated already the big precious metal companies don’t pay the highest prices. So you may be wondering, how exactly you can make a profit?
Stay Tuned for Part Two