3 Tips for Buying Scrap Gold

Among the world's various currencies and commodities, gold reigns supreme. While the value of gold is certainly volatile, its value only tends to increase during periods of economic uncertainty, decline, or collapse—in extreme cases. If you're looking to buy scrap gold as an investment or to sell to refineries at a profit, take a look below at just three of the most important things you'll want to keep in mind before you begin.  

Get Licensed

Even if you're just buying scrap gold as a side business, you'll want to check how your state's laws affect it. Some states are likely to require individual dealers who buy and sell gold to obtain a general business license. Other states may have a specific license, such as one for precious metals dealers, that is also necessary. While obtaining a license as a buyer or seller may seem overwhelming or time-consuming, operating as a scrap gold buyer without a license may be technically illegal, and therefore never worth the risk. 

Gather Tools

Buying scrap gold requires more than just a license and some free time. To do your work effectively, you'll need a handful of tools. A gold testing kit, a scale, a file, and a magnifier loupe are just a few examples. Most tools that gold buyers use on a daily basis are easy enough to acquire both online and in brick and mortar stores, but make sure you are comfortable using all the relevant tools before you start buying professionally. For example, if you are using an acid gold testing kit, you should be familiar with the various acids, what carat they test for, which reactions signify which results, and how to value the gold based on its carat and weight.

Research the Local Competition 

If you are aiming to buy scrap gold from individuals in your community or personal network, then it is well worth it to research what other local buyers are doing. Perhaps more than anything else, you should always be aware of gold's official market price—which can change by the minute—as well as what nearby refineries are offering to pay sellers directly. In addition, you may find it easier to focus on a particular niche of the market. Many buyers, for example, prefer to limit themselves to gold that is 90 percent pure to distinguish themselves from the competition. 

To learn more about the process, contact companies that buy scrap gold.