Buying gold from the public questions

[Gowtu]

Hi guys. I like this site!

I have a few questions about buying gold & silver from the public in face to face settings:

If you buy gold bullion or silver bullion, how do you test those without destroying them, in the case of the rarer ones?

How do you test silver without destroying it? Acid tests basically destroy the silver.

Also are there any gold buyers in Michigan who can recommend a local refiner? I prefer the walk ins so I can get my cash faster as opposed to mailing it in so I can keep the buying capital flowing.

Any you guys happen to know the laws in Michigan regarding buying & selling gold? Do I need the same license as a pawnbroker?(I will call around today, but am hoping that someone already went to that process to provide more indight)

Thanks

 

[ps2fixer]

I'm from Michigan and my friend owns a Coin shop. He is licenced to purchase presous metals which I think he got from a police station. He is required to hold any jewerly for 60 or 90 days, and if you receive stolen peices, you loose them to the police and are not paid for them (happened twice).

A quick google search landed me on this page: http://www.michigan.gov/statelicensesearch/0,4671,7-180-24786_24822-81482--,00.html


As for testing, he has worked around coins all of his life, so he knows what the real ones look like, and has a lot of them on hand to compair if he isn't sure. Typically faked silver is poorly made, and you will notice the coin isn't centered correctly, invalid sizes, etc.

A month or so ago I bought 30 Engelhard 1oz silver coins to him that I bought on ebay for $2 under spot including shipping to have him verify. Here is a list of what he found:

-Biggest one.... it was stamped as a proof (background mirrored finish, foreground frosted), this exact coin was never minted that way
-The coins all looked NEW, because they were new and not from 1984 (not always the case, but good thing to point out)
-The actual size of the coin is wrong compaired to a legit one, it was thicker and larger around.
-Weight of each coin ranged a bit, but most were under weight, around 9.87 troy ounce.
-The coin stamp was off centered on almost all of them, real ones are centered better
-The "drop" test confirmed it 100% it wasn't silver, silver has its own ring compaired to other metals. We are guessing the coins are nickel/silver plated copper


If you are new to coins, I would suggest buying a coin pricing book which points out double die coins, flaws, and other odd markings that are legit vs fake.

For jewlery, it isn't easy to test with out acids unless you have the special equipment. Even marked gold/silver is sometimes not legit. Color and weight compaired to its size can be a fair guess, but that does not cover plated rings and such. A scrape stone and the test acids is what the coin dealer uses.

Selling the scrap is another story, so far he sends his silver to CA and gets around 86% of spot for the actual silver in it, up front. For gold, he sells to antoher coin dealer for exchange for some coin grading services. I think he gets around 70% spot of actual gold content.

Sorry for the huge post, just dumping what I have learned in the last couple of months . If you want, I could contact my friend and see if he is willing to share who he sells to (via pm).

 

[jimmydolittle]

I don’t understand what you are talking about when you say bullion. Most people you deal with will only have jewelry, coins, or silverware. In that case you will absolutely want to test those items before buying. Choose an inconspicuous spot and file a small notch and put a drop of test acid on it and watch for a reaction. If you are talking about “bullion” then you will also want to test it. Drill several small holes in different places, and test the shavings that come out on a spot plate.

 

[Gowtu]

I'm from Michigan and my friend owns a Coin shop. He is licenced to purchase presous metals which I think he got from a police station. He is required to hold any jewerly for 60 or 90 days, and if you receive stolen peices, you loose them to the police and are not paid for them (happened twice).

A quick google search landed me on this page: http://www.michigan.gov/statelicensesearch/0,4671,7-180-24786_24822-81482--,00.html


As for testing, he has worked around coins all of his life, so he knows what the real ones look like, and has a lot of them on hand to compair if he isn't sure. Typically faked silver is poorly made, and you will notice the coin isn't centered correctly, invalid sizes, etc.

A month or so ago I bought 30 Engelhard 1oz silver coins to him that I bought on ebay for $2 under spot including shipping to have him verify. Here is a list of what he found:

-Biggest one.... it was stamped as a proof (background mirrored finish, foreground frosted), this exact coin was never minted that way
-The coins all looked NEW, because they were new and not from 1984 (not always the case, but good thing to point out)
-The actual size of the coin is wrong compaired to a legit one, it was thicker and larger around.
-Weight of each coin ranged a bit, but most were under weight, around 9.87 troy ounce.
-The coin stamp was off centered on almost all of them, real ones are centered better
-The "drop" test confirmed it 100% it wasn't silver, silver has its own ring compaired to other metals. We are guessing the coins are nickel/silver plated copper


If you are new to coins, I would suggest buying a coin pricing book which points out double die coins, flaws, and other odd markings that are legit vs fake.

For jewlery, it isn't easy to test with out acids unless you have the special equipment. Even marked gold/silver is sometimes not legit. Color and weight compaired to its size can be a fair guess, but that does not cover plated rings and such. A scrape stone and the test acids is what the coin dealer uses.

Selling the scrap is another story, so far he sends his silver to CA and gets around 86% of spot for the actual silver in it, up front. For gold, he sells to antoher coin dealer for exchange for some coin grading services. I think he gets around 70% spot of actual gold content.

Sorry for the huge post, just dumping what I have learned in the last couple of months . If you want, I could contact my friend and see if he is willing to share who he sells to (via pm).

Thanks for the info.

I had made some calls in the meantime. In my city I need to keep a record of the item bought for the items bought. The requirements seem differ from city to city.

I think I just won't take gold coins or silver until I'm more familiar with them. I do have experience with jewelry but coins are a whole different story. Never dealt with them.

I also found a refiner who refines your gold while you wait. I will give him a try.

 

[philddreamer]

Gowtu, you just need to search the internet for the information.

I found some in reference to Morgan silver dollars here:
Read more: How to Spot Fake Morgan Silver Dollars | eHow.com http://www.ehow.com/how_4821306_spot-fake-morgan-silver-dollars.html#ixzz1fCkTYKDT

Also at:
http://coinflation.com/

For example:
*** The 40% silver version of the Eisenhower dollar was issued as a collectible only, they are generally not found in circulation. The best way to distinguish the two versions is by weight. The copper-nickel version weighs 22.68 grams, the silver Ike dollar weighs 24.59 grams.

This way you won't have to destroy the coin.

Hope this helps!

Phil

 

[goldenchild]

I also found a refiner who refines your gold while you wait. I will give him a try.

Knowing how long refining takes from a-z even having state of the art equipment and the process down pat, this sounds fishy. I wouldn't let the gold out of my site throughout the entire process. If they refused to let me follow the entire process through I would walk.

 

[niteliteone]

I also found a refiner who refines your gold while you wait. I will give him a try.

Do they have a tent and a portapoty in the parking lot for you? :?:
Your going to be there for a while. :shock:

Tom C.

 

[Gowtu]

I also found a refiner who refines your gold while you wait. I will give him a try.

Knowing how long refining takes from a-z even having state of the art equipment and the process down pat, this sounds fishy. I wouldn't let the gold out of my site throughout the entire process. If they refused to let me follow the entire process through I would walk.

I spoke with the refiner again with more questions. From what I understand he said, he will melt down my gold, drill it??? And pay me out according to the gold content.

Does that make sense?

It seems it is a melt down rather than a refining. It doesn't really matter to me what he does with it as long as he pays

Also this refiner requires a minimum of $3000 worth of scrap(unrefined)

 

[goldenchild]

A little better but still a bit strange. If hes talking about drilling and then assaying the drill samples fine. But if he plans on using an xrf reading on the drillings run. XRFs are very bad with lower karat gold. When I was making my custom pendent I had a chain xrf'd so I could know the exact alloy composition to match it. The chain was 10k. One reading read I believe as low as 38% gold content and the other read as high as 44%. The part that is strange to me is how will you know if you have $3000 worth of scrap if no tests have been done? Do they sit there and test every piece before melting? If anything I would make sure to ask if they will assay your drill samples or do an xrf scan. Also have a good idea of how much gold you DO have before going in.