Wondering how cash 4 gold businesses make money? In recent years, there has been an unprecedented increase in the emergence of new cash 4 gold companies. There are so many of these businesses, especially online, that it seems like a scam. Why would so many business entities be interested in buying your gold? How do they make their money? Read on to find out.
Gold 4 cash companies buy large quantities of gold, melt it down, and resell it for more. Here’s the catch: these companies typically require the seller (customer) to mail the gold or gold jewellery to the company for evaluation via registered mail. Once the company receives the gold, they perform an evaluation before providing a check to the seller. It’s worth noting that for the majority of gold 4 cash companies the seller doesn’t have the right to refuse the amount offered for the gold.
Because the seller must accept whatever amount the cash 4 gold business deems the gold is worth, this type of business is to the advantage of the gold buying company. In fact, majority of sellers usually receive only a fraction of the promised sums. On the other hand, those companies that allow sellers to return the check and have their gold returned usually charge a predetermined amount as shipping and handling fee. This fee can vary by company, and is often one of the biggest sources of income for these businesses.
During the last decade, gold prices have skyrocketed as demand increased. The biggest rise was recorded during the recession, which is not surprising since gold is often seen as a safe investment during times of crisis. The current high gold price is behind the proliferation of gold 4 cash businesses in the past few years. While gold demand continues to grow, production is slowing, just as is the case with other metals such as copper. So gold is becoming rare, and only a little amount of new gold is being introduced into the market. The reduced gold mine supply and increased demand mean price can only go up.
The only gold that’s available today is the gold already being held by private individuals in the form of jewellery. Gold 4 cash companies know this, and that’s the reason they are vigorously buying gold from private individuals. They have set up numerous websites to entice people to flog their old gold jewellery pieces and make big money. But there have been many horror stories from people who have sold their prized gold to these companies. Many people have reported receiving insultingly low prices for their gold. These prices are always far below the current spot gold price of $1,272/oz. What they don’t realize is that these gold 4 cash businesses buy their gold on the cheap, melt it down and resell it to jewellers for more, thereby making good money.
If you’re looking to sell some gold jewellery, you need to find a trusted company that can give you the most value for your gold. With such a company, you’ll find that you’re able to turn a decent profit and you won’t be disappointed at the amount of money you receive for your gold.