You've seen the commercials where a pitchman tells you that you can sell unwanted gold by dropping broken necklaces into an envelope and sending them to him. Unfortunately, when selling scrap gold, according to MSN Money Central, you can lose 75 percent or more of the retail value for your gold scraps. There are several options for selling your gold, but first you should understand how gold is valued.

All That Glitters

Gold prices were on a steady increase at the beginning of the 21st century. In 2009, gold hit an all-time high at more than $1,000 per ounce. Gold prices are based on a troy ounce, which is 31.1 grams, rated at 24K (karat). Because gold is a very soft metal, most gold jewelry is considered "impure," meaning that 24K gold has been mixed with a base metal to provide stability and bring down the cost. When selling gold, keep in mind that the lower the carat, the lower the price. If the gold you have is 10K, the actual gold content in the piece is about 40 percent, and you will be paid accordingly.

Get it Appraised

Before you sell your gold, know what it is worth. Bring the gold to a jewelry store and ask them to weigh it. You can also contact the National Association of Jewelry Appraisers for offices near you to have your gold appraised. They do charge a fee, however, so balance that fee against how much gold you are selling to make sure it is worth paying the appraisal fee.

Gold Brokers

Research gold brokers. You can find gold brokers online and in the telephone book. Make a list of the brokers that you are considering. Check with the Better Business Bureau to ascertain if the broker has had any complaints. Visit their website to read consumers' comments. Whether you are selling your gold to pay your mortgage or to take advantage of the record-high prices, know to whom you are selling. Bear in mind, as well, that seeing the buyer in person doesn't guarantee they are reputable. If you decide to mail your gold, select a company that insures shipping at no cost so you can track your package. Take pictures of your jewelry and include a full itemized list. Keep a copy of the pictures and list items for yourself.

Pawnbrokers

If you are strapped for cash and an emergency arises, you can generally get cash for your gold from a pawn shop. They will buy your gold, although usually at much less than fair market value. Selling outright to a pawn broker rather than pawning your gold means taking a serious hit on value.

Source:

MSN Money Central

National Association of Jewelry Appraisers