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The surging gold price has brightened the financial prospects for those considering selling scrap gold or collectable coins, as UK high street pawnbrokers report a new wave of customers.
Gold hit a record $3,500 per troy ounce for the first time at the end of April as investors piled into safe haven assets amid the market volatility unleashed by President Trump’s trade war. While the price has now retreated from recent highs, pawnbrokers say it has promoted more people to inquire about the value of gold items that could be sold or pawned.
Sutton & Robertsons, which has four stores in central London and operates an online service, says it has seen a 30 per cent increase in first-time pawnbroking customers year-on-year. About 90 per cent of its loans are secured against gold, luxury watches and jewellery and up to 75 per cent of the gold’s spot price can be advanced.
Jim Tannahill, managing director, says his customers — many of whom are entrepreneurs and small business owners — are aware they can borrow more against their gold items than they ever could before. H&T, the UK’s largest pawnbroker, reported record profits at its full-year results in March, saying the soaring gold price had boosted the number of new pawnbroking customers to an all-time high.
However, others are looking to sell their items and cash in. Sutton & Robertson’s average monthly gold purchases have increased by 105 per cent since last September, compared with the preceding eight-month period.
One of the biggest trends is collectors looking to sell their gold coins. Profits from selling British sovereigns and Britannias made by the Royal Mint have the advantage of being free of capital gains tax. “If you’ve been collecting them over the years, you would have done well,” he says, adding that plenty of people pass them on as gifts for children and grandchildren.
However, customers are also realising the soaring value of unwanted or broken items of gold jewellery. As an example, over the past three years, the scrap price for a man’s chunky gold wedding band has risen from £300-£400 to £500-£600, depending on the exact weight and carat. A woman’s wedding band would be worth around half of this rate. An 18-carat gold chain weighing around 15 grammes could command £700-£900.
Those considering selling gold items can do some detective work about an item’s potential value before approaching buyers. Tannahill suggests looking for hallmarks on gold items which indicate their purity. Numbers nine, 18 or 22 denote the carat, which could also be displayed as 375, 750 and 916 respectively (this relates to the percentage of the item made from pure gold; 37.5 per cent for nine carat and so on).
Live gold price per gramme data can be found on trade websites like Mastermelt (though dealers tend to offer 10-15 per cent lower than this).
One potential downside of gold’s dramatic rise is that the intrinsic value of many items, like antique pocket watches, has been overtaken by the scrap value of the gold they are made from.
Tannahill said that Art Deco pieces and gold jewellery from brands such as Cartier and Tiffany still had a value “beyond their weight in gold” so long as they were in good condition.
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