Ultimate guide to valuing your gold and selling it for the best price, by expert pawnbroker Dan Hatfield

It’s hard to believe that I’ve been in the pawnbroking business for a quarter of a century now, even though as a third-generation pawnbroker I’ve been in and around this sector all my life.

For my family, buying and selling gold is not just a business; it’s in our blood.

I remember when the price for gold was so stable in the 1990s that we framed it in the store so customers could see exactly what we would buy it for. My mother bought 9 carat gold at the time for £3.53 per gram.

But in 2005, things started to change and we entered a new era: the era of the ‘golden roller coaster’.

For almost two decades, the gold price has been on quite a volatile journey, with sharp troughs and dizzying peaks that I find exciting. Since the early 1990s, the value of gold has increased exponentially.

To put this into context, in 2004, as a young pawnbroker, 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 amazes me.

And this trend appears to be accelerating; Gold has risen almost 40 percent in the past year alone. I’ve never seen anything like it.

With the cost of living rising and this week’s Autumn Budget being announced, now can be a very lucrative time to sell if you are lucky enough to own gold.

And I know firsthand that millions of British people have gold. It is a metal that is used by all walks of life. From low-income people to billionaires. It is a substance that seems to have a strong, age-old influence on us as a society, as a species.

But what drives these huge increases in value? I think there are six main reasons:

1. Economic uncertainty: Gold is a ‘safe haven’ in uncertain times, and the past twenty years have been turbulent. When problems arise, investors turn to gold to protect their wealth.

2. Inflation: When inflation rises, the value of paper money decreases and gold becomes an attractive alternative because it retains its value.

3. Weakening Currencies: During times of recession, investors opt for falling gold currencies, increasing demand.

4. Lower interest rates: When interest rates fall, investors often switch to gold as it can offer higher returns.

5. Geopolitical factors: Conflicts or tensions, whether in Europe or the Middle East, always enhance gold’s appeal as a stable asset.

6. Central bank activity: Central banks worldwide are buying gold in record numbers, driving up demand and prices.

Taking all this into consideration, should you sell or hold your gold?

Well, experts like me are divided: some predict that gold will continue its growth trajectory, while others are more cautious about the fact that markets can change unexpectedly. I can’t give you a definitive answer, but if selling fits your financial situation, I can tell you how to identify what you have, what it’s worth, and where to sell it.

It’s amazing how much gold people unknowingly throw away. I’ve had clients who found valuable gold at car boot sales, at charity shops – even at skips. When someone dies, family members often clear away items that could have serious value.

When you’re ready to take stock, search all the drawers, boxes, and those odd places where small items like earrings might end up. It’s worth noting that white gold items can resemble silver, so don’t throw away anything that looks tarnished; anything that appears to be gold requires closer inspection.

Test at home to see if it is gold

I have three simple hacks to help you determine if your gold is real:

1. Magnet test: Real gold is not magnetic, so if the object sticks, it’s probably not gold. Please note, however, that some items may contain other metal parts, such as clasps, that react to magnets.

2. Scratch test on ceramic: Run the piece over an unglazed ceramic surface (such as the bottom of a coffee cup). Real gold leaves a golden streak; counterfeits often leave a black mark.

3. Vinegar Test: Place a drop of vinegar on the item. If it dulls, it’s probably fake; real gold will not change.

These tests are not definitive, but can help determine whether an item warrants further investigation.

Not all gold is created equal

Another clear way to identify gold is if it has a hallmark.

In Great Britain, hallmarks have been a legal requirement since the 14th century. These marks identify the purity of gold and are essential because different purities yield different values. Here’s a quick guide:

• 375 (9ct): The most common British standard, containing 37.5 percent gold.
• 585 (14 carats): Contains 58.5 percent gold, usually imported from countries such as America and Southern Europe.
• 750 (18kt): 75 percent gold, used for fine jewelry.
• 916 (22 kt): 91.6 percent gold, popular in Asian jewelry markets.
• 999 (24 kt): almost pure gold, usually in bars or coins, also called investment gold.

You may also come across 8 carat gold (from Germany) or 15 carat gold, which used to be recognized in Britain.

This is not to say that those without hallmarks are not genuine, as there are international locations where hallmarks are not as common or a legal requirement. So if you suspect an item is gold, have it checked before throwing it away.

What’s it worth?

To determine the value of your gold, download an app like Kitco, which displays current 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 for pure gold was £69.10. If I have a 9 carat gold ring with a purity of 37.5 percent, the price per gram I am looking for is £25.91.

Keep in mind that buyers deduct a margin for the cost, so the amount you can expect will be slightly lower and prices vary by supplier, so it’s worth calling around.

Today I found offers for 9 carat 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 shopping around is not only recommended by me, I insist. Yes, it takes time, but it pays off.

If you have identified gold and would like to sell it, I have chosen different markets for different categories:

• Scrap Gold: Try a reputable pawnbroker or online gold buyer.

• Diamonds and fancy pieces: Luxury jewelers often offer more for diamond settings.

• Vintage jewelry: Consider platforms like Etsy, which attract buyers looking for unique items.

Sometimes gold isn’t worth just its intrinsic value. Your pieces may be resold and if so, you can use the gold prices you can now use as a basis to barter with pawn shops and jewelers.

If a piece of jewelry is worth more than its melt price, you should receive more than its salvage value.

That’s why it’s crucial to shop around and ask the potential buyer what their intentions are with it.

If it ends up in the shop window, you can start trading. For some of your nicer items it may be worth taking them to a reputable auction house to get a price for them too.

By painting a bigger, more complete picture of value and having multiple conversations, you can ensure you get the best price for your pieces.

Are you taxed if you sell gold?

Finally, don’t forget to check any tax liabilities that the sale of gold may entail for you. There has been a lot of talk in the media about HMRC’s new requirements for selling platforms to report user income.

If you sell your assets, capital gains tax applies after crossing certain thresholds. This amount increased after Thursday’s budget, so keep this cost in mind if you sell.

However, some items, such as the Royal Mint’s gold government bonds, are exempt from tax. This is classified as legal tender and thus does not feel the wrath of capital gains tax.

If you decide to sell, now may be one of the best times to do so. If you choose to hold on, you may be glad you did.

After all, the gold market is nothing if not unpredictable. Anyway, we are currently living through 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!