You’re staring at a pile of old jewelry, maybe a few Krugerrands your grandfather left you, or a stack of Maple Leafs you bought back when the economy looked shaky. You want cash. Specifically, you want to convert gold to dollars because, let’s be honest, you can’t pay your mortgage in bullion.
It feels like it should be simple. It isn't.
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Gold prices are high right now. The spot price—that number you see flickering on the news or on Kitco—is a tantalizing figure, but it’s rarely what you actually get in your pocket. There is a massive gulf between "value" and "payout." If you walk into a random shop without a plan, you’re basically asking to be taken for a ride. I’ve seen people lose 30% of their wealth in a single transaction just because they didn't understand the "spread" or the difference between scrap and sovereign coins.
The Spot Price Myth and the Reality of the Spread
Let’s get one thing straight. The spot price is for 400-ounce bars traded in London and New York. Unless you are a central bank or a massive hedge fund, you aren't trading those. When you decide to convert gold to dollars, you are operating in the retail market.
Retailers have bills to pay. They have rent, insurance, and staff. So, they buy below spot and sell above it. This gap is the spread. If gold is trading at $2,400 an ounce, a reputable dealer might offer you $2,330. A "We Buy Gold" kiosk at the mall? They might offer you $1,600. It's predatory, honestly.
You need to know the purity. 24k is pure. 18k is 75% gold. 14k is roughly 58.3%. If you bring 14k jewelry to a buyer and they try to pay you based on the total weight as if it’s all gold, they’re lying. But more commonly, they’ll weigh the whole thing and then apply a "refining fee" that’s basically a hidden tax.
Where You Sell Matters More Than What You Sell
You have options. Some are great. Others are terrible.
Local Coin Shops (LCS) are usually your best bet for coins and bars. These guys live and die by their local reputation. They want your repeat business. If you have a Gold American Eagle, they’ll likely give you a price very close to spot because they can resell that coin tomorrow.
Online Bullion Dealers like APMEX, JM Bullion, or SD Bullion are the heavy hitters. They are incredibly reliable. They have transparent "buy back" prices listed right on their websites. The downside? You have to ship your gold. That means insurance costs and the anxiety of watching a package containing thousands of dollars traverse the country. It's not for the faint of heart, but it's often where you find the best rates when you convert gold to dollars in high volumes.
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Pawn Shops are for emergencies only. Look, pawn stars are great for TV, but in real life, their business model is built on high margins. They know if you’re in there, you probably need the cash today. They will lowball you. It’s not personal; it’s just how they stay open.
Jewelry Stores are a mixed bag. Some specialize in estate pieces and will pay a premium if your gold is "signed" (think Tiffany or Cartier). Most, however, just see your jewelry as scrap to be melted down.
The Weird World of Taxes and Reporting
Nobody likes talking about the IRS, but they’re definitely interested in your gold.
When you convert gold to dollars, it is technically a capital gains event. If you bought an ounce for $1,200 and sell it for $2,400, you have a $1,200 gain. In the US, gold is often classified as a "collectible." This is a kick in the teeth because the long-term capital gains rate for collectibles can be as high as 28%. That’s significantly higher than the standard 15% or 20% for stocks.
Also, there’s the 1099-B factor. Dealers are required to report certain transactions to the IRS. If you sell 25 ounces of Gold Maple Leafs, that’s a reportable event. If you sell a few bits of scrap jewelry, it usually isn't. People get paranoid about "confiscation" or "tracking," but mostly, it’s just about the government getting their cut of the profit.
Avoid the "Mail-In" Scams
We’ve all seen the commercials. "Just put your gold in this prepaid envelope and we’ll send you a check!"
Don't. Just... don't.
These companies rely on the fact that once your gold is in their possession, you’ve lost all your leverage. They send you a check for a pittance, hoping you’re too lazy or embarrassed to demand your gold back. Some are legitimate, but the "convenience fee" you pay is astronomical.
How to Actually Do the Deal
- Get a Scale. Not a bathroom scale. A digital scale that measures in grams and troy ounces. Remember, a regular ounce is 28.35 grams. A troy ounce—the standard for precious metals—is 31.1 grams. Know the difference so you don't get shortchanged.
- Test for Purity. You can buy a basic acid test kit online for twenty bucks. It’s fun, a bit nerdy, and it keeps dealers honest. If your "gold" bar turns green under the acid, it’s copper. Better you find out at home than in public.
- Check the Current Spot Price. Check it the minute before you walk into the shop. Prices move every second.
- Call Around. "Hey, what are you paying for a 1oz Gold Buffalo today?" A legitimate dealer will give you a price over the phone. If they say, "You have to bring it in first," they’re likely planning to negotiate you down.
- Bring ID. Federal anti-money laundering laws (the Patriot Act, essentially) require dealers to verify who you are. If a dealer doesn't ask for ID, they’re probably shady, and you should leave.
The Emotional Hurdle of Selling
Gold is emotional. It’s "real" money. Selling it feels like giving up a safety net.
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But gold is an unproductive asset. It doesn't pay dividends. It doesn't earn interest. It just sits there looking pretty and being heavy. If you need the cash for a down payment, to kill high-interest credit card debt, or to invest in a diversified index fund, then converting that metal into liquid currency is a smart move.
Don't let the "gold bugs" scare you into holding forever. The whole point of an investment is to eventually use the money.
Actionable Steps for Your Sale
Start by cataloging what you have. Separate the coins from the jewelry. Use a magnifying glass to look for "hallmarks"—those tiny stamps that tell you the purity (14k, 585, 18k, 750).
Next, find three local coin shops with at least a 4.5-star rating on Google. Call them. Ask for their "buy price" on a specific item you own. This gives you a baseline.
If you have high-value bullion, check the buy-back price on a site like JM Bullion. If the local shop is within 1% or 2% of the online price, sell local. The immediate cash and lack of shipping risk are worth the small spread.
Once you have your dollars, have a plan. Don't let the cash sit in a zero-interest checking account where inflation will eat it alive. Put it to work. Whether it’s an HYSA, an IRA, or just paying off that 24% APR Visa card, make sure the move from gold to paper serves a specific purpose in your financial life.
Gold is a hedge, not a religion. When it's time to sell, be clinical, be informed, and don't leave your money on the dealer's counter.