Want to cash in your gold with prices at historic highs? Here's how to sell it
You might call it a golden opportunity. With prices hovering near historic highs, many Canadians are wondering if they can make a mint selling their gold bars, coins and jewelry. But what if the banks won’t buy it? Here, the Financial Post looks at where to sell gold in Canada, how it’s priced, and offers tips for finding reputable buyers.
Will banks buy your gold?
Most of Canada’s Big Five banks sell gold bullion bars or coins in some capacity. However, not all will buy precious metals from retail customers. The majority of banks only buy high purity “investment grade” gold from recognized sources, such as the Royal Canadian Mint.
Each bank has different rules, so it’s important to check their requirements. They usually ask for the seller’s identification along with proof of purchase and will issue payment after verifying the gold is authentic.
Toronto-Dominion Bank (TD) allows customers with a valid TD account to sell gold, silver and platinum bullion and coins that are in good condition and from a list of approved refiners. Customers can make an appointment at any of its branches.
Royal Bank of Canada (RBC) will buy certain gold and silver products from customers through its branch network, but only if it was originally bought from RBC and sellers must provide proof of purchase.
Canadian Imperial Bank of Commerce (CIBC) will buy gold and silver investment-grade bars and coins from clients at its branches. The gold doesn’t have to originate from CIBC, but it must be a product that the bank sells, which includes refiners and brands such as the Royal Canadian Mint, Credit Suisse, Sunshine Mint and Swiss Bank.
The Bank of Nova Scotia shut down its precious metals business in 2021 and does not currently sell to or buy gold from retail customers. And, according to its website, the Bank of Montreal (BMO) runs a gold deposit program that allows customers to buy gold and have it stored in its vault at the Royal Canadian Mint or request physical delivery. Sales within the program are on a cash settled basis.
Where else can you sell gold?
Canadians can sell their gold through specialized buyers and dealers, coin shops, jewelry stores and pawnbrokers. Online and private sales are also options, but those are riskier.
“To test gold, you really need a lot of expertise and a lot of equipment,” said Chris Pollock, founder and managing partner of Canada Gold, which buys and sells gold, silver and other precious metals at 15 locations across the country.
Pollock said his business mostly buys bullion or jewelry, but in the end, gold is gold — even if it’s unusual. Pollock said Canada Gold has purchased unique items such as gold baby spoons, dental grills and even fake fingernail tips.
“We’ve bought big chains worth more than $20,000, like a heavy gold chain that has a diamond encrusted Bart Simpson on it, for example,” he said.
Jewelry buyers and precious metal shops are regulated by local laws and are required to obtain a municipal business license. They are also held to certain reporting and recordkeeping requirements and must have a second-hand goods register, which includes details of all items that are bought or sold and the seller’s identification, to prevent the sale of stolen property.
For that reason, Pollock advises against selling gold through travelling buyers who advertise via flyers in the mail and set up pop-up events in rented spaces such as hotel ballrooms.
“You may inadvertently be supporting a business that is fencing stolen goods because it’s a place where somebody can sell their items and know that they’re not going to be reported to local police,” he said.
How does pricing work?
How much you can fetch for your gold is based on the “ spot price ,” which is the current market value for an ounce of gold at this exact moment. Gold’s spot price fluctuates frequently throughout the day based on global supply and demand and overall investor sentiment.
How close you’ll get to the spot price depends on the type of item and its purity and weight. Pollock said certain minted gold coins will get full spot value because they can be resold at a premium, while scrap gold jewelry commands a smaller payout because it needs to be refined.
Pollock said Canada Gold publishes real-time prices on its website and performs density tests, x-rays and electrical conductivity.
“We test it to make sure the purity matches what is stamped on the item to make sure it’s authentic,” he said. “Once that’s done, it’s simply a case of using the posted metal prices on our website, measuring the weight accurately, and then we multiply those two together to calculate the payout.”
Just like vintage toys, sneakers or other collectibles, condition matters. Pollock said mints and refiners sell bullion bars or coins with an assay stamp or card that certifies the item’s weight and purity. If the packaging or assay card is damaged, sellers could get a lower payout or may not be able to sell their gold at all.
“When that’s damaged, it’s more difficult for the bank or for the bullion dealer to resell,” he said. “It’s just like when you go into a Best Buy and there’s an Apple product in damaged packaging, you get an open box discount.”
What should people look out for when selling their gold?
As the saying goes, all that glitters is not gold. Pollock said customers have come into Canada Gold stores to sell their wares only to find out the item is counterfeit.
“We see customers who have purchased gold directly from another person and are the victims of fraud, and they’ve bought a really convincing-looking but unfortunately fake piece of bullion,” he said.
Whether you’re buying or selling, Pollock said it’s important to seek out reputable businesses. Pollock said sellers should look at the store’s reviews and how long they’ve been in business, whether they’re transparent about pricing and fees and make sure your gold is tested in front of you.
“I think it’s good to do your research, try to figure out what your item is worth, and then shop it around a little bit to reputable buyers,” he said. “You can read online about businesses’ reputations, and I think it’s also advisable to go to a place where you can see up front how much money you’re expecting to get.”
Pollock said sellers should also ask if the gold buyer has accreditation from Measurement Canada, a federal government agency that tests and certifies scales and other tools for accuracy.
“With gold, the current value is over $200 per gram, so tiny errors in the scale can actually correspond to a pretty big difference in the payout.”
Pollock noted that if you bought a ring or necklace years ago, you could be sitting on a gold mine.
“Gold has appreciated so much that they’re probably sitting on jewelry that’s worth much more than they initially paid for it.”
• Email: jswitzer@postmedia.com