Selling a piece of gold now?

wrenlegs

I have had a gold necklace given to me years ago that I will never wear and have kept merely as an investment. The price of gold is heading for a record high now (from what I’ve read). I’m thinking of selling this necklace while the price is high and then investing the money someplace else. We are talking about 150 quid here. When the gold price drops I might buy some more gold with my 150 (reinvest). Is this a good plan? Any other ideas? Please be kind - I’m not an investor, just someone with a small unused gold necklace gathering dust...

Alistair31

If you have no intention of wearing it then now is certainly not a bad time to flog it. 

Obviously you’re not talking about large value here but get a couple of quotes, the less reputable gold buying places will likely try it on thinking you are desperate. 

wrenlegs

I would probably sell to Hattongarden but you are right about getting another quote. It’s gone up to 160 this morning already. Should I wait a bit longer? What would you do with 150? Can I invest it in something else?

bowlhead99

wrenlegs said:

I would probably sell to Hattongarden but you are right about getting another quote. It’s gone up to 160 this morning already. 

Hatton Garden like other dealers will pay a few percent less than price of solid gold bars if they are buying scrap gold. With the amounts mentioned it sounds like your necklace has 3-4 grams of gold content (it will weigh more than that if it is only 9ct or 18 ct).  If it is a very nice necklace you might fetch more for it on the second-hand market than just giving it to a gold dealer. For example the gold in a gold Rolex Daytona is worth thousands more as part of a collectible watch than it's worth as scrap gold.  But if it's unexceptional, probably a reasonable thing to do to just give it to a gold merchant. 

Should I wait a bit longer? 

What you can say is that the price of gold changes all the time and until the last couple of months it had never been as high as its current £45k per kilo. If you had been holding the necklace in summer 2011 when the gold price was higher than it had ever been at £36k a kilo, you might have thought it a great idea to hold on for it to go even higher. But it started to go downwards instead and four years later it was back down at £22.5k a kilo and it didn't reach £36k again until last year. 

Frankly for something that's only worth £150 rather than something you plan to retire on, you might as well cash out, knowing the gold is worth twice as much now as it would have been in summer 2015.

What would you do with 150? Can I invest it in something else?

'What would you do with £150' is only going to get you vague answers - most people here probably have incomes of between £5000 and £500,000 a year but they will have  completely different personal financial circumstances, and so what they would do with £150 doesn't really tell you what you should do with £150.  You could put it in an investment fund. You could put it in a savings account for a rainy day. You could buy some garden furniture for a sunny day.

wrenlegs

Thank you for your comprehensive reply. I do appreciate it. 

You are right - maybe I should see if I could get more via an auction or jeweller (it’s pretty plain so I’m not sure it would). But it’s made me think that I could try to make that money grow by investing in ways I have never tried before e.g. fractional shares. When the gold price comes down I will invest my 150 again I think. Am I totally crazy for thinking this?

bowlhead99

Well yes you *could* invest in a fraction of a share of Amazon or Google.

Say you buy a tenth of a share of Amazon or a fifth of a share of Google for example.  At the moment, the stock market values those companies at a trillion dollars or more. Next year depending on how the world economy and stock markets perform, maybe the market will value those companies at two trillion or just half a trillion, so your fractional share might be worth £300 or £75 or some other value - eventually perhaps nothing (stranger things have happened, companies fail or get taken over all the time).

Generally when people talk about 'investing' here they refer to buying an investment fund, often within a pension or ISA. That is generally how people build their wealth over the longer term for retirement or whatever. The investment funds will invest in tens or hundreds of companies and there is no need to pick which specific company you'd like a 'fraction' of.   

Of course, you could find a cheap broker and gamble on individual stocks. You might make more or less than a diversified approach using funds, but it is more of a gamble.  For example when a company enrolls its employees into a pension fund to provide for their retirement, they would do this using investment funds within the pension rather than encouraging the staff to select and buy a fractional share of some random company on the stock exchange.

If you put £160 extra into your pension for example, the tax man would gross it up for basic rate tax so you'd get £200 in the pension which could then grow for your retirement - the long term investment growth on top of the tax relief would be quite useful, and probably better than picking a company name out of a hat and buying a 'fractional share' of it.  If your company offers 'salary sacrifice' you would be able to divert some of your salary into the pension and save national insurance contributions on the money put into the pension as well.

jonnygee2

That said not much harm in putting £150 in to see what happens, so long as you can afford the loss if it goes badly. Still, putting it in a stocks and shares ISA and investing in a nice wide fund is certainly the most sensible investment option.

I do think it's a good time to sell the necklace. Gold might go up more, it might fall, no one knows so the best thing to do is act on what we do currently know - it's at a record high.

wrenlegs

Thanks both. I think I’m going to sell it. And I’m going to investigate a fractional share and the stocks and shares ISA and see how I feel. I’m a generally risk averse but I like the idea of seeing if I can make this money grow in ways I don’t usually try. It’s a bit exciting (for me). I’ll come back and sob when I’ve lost it!

DiggerUK

wrenlegs, Digger Mansions is a large holder of gold. 

It sounds like you have 10/11 grammes of 9kt. in your necklace.    You will appreciate that  £150 is a small amount, so investing in gold is not a good plan, especially as you already have some gold. Just hang on to it.
If you do need to realise the cash what would you achieve?....but if that is what you want to do, go with Hatton Garden, there is a thread on MSE. I've dealt with them and can recommend them..._

wrenlegs

Hi Digger,
Thank you for your reply. 

But... if I hang onto it, doesn’t that mean that realistically the value is going to decrease? I may have to wait a long time for it to reach the same value again. And even if it does, then what? Sell it then? At some point I have to sell it else what’s the point in having it. I just think why not release the cash now when it’s nearly at a record high, wait for the value to drop, buy more using my 150 and then sell when it when the value creeps up again. I am a total novice at this - I’m no gold investor so I am grateful for input on this. 

bowlhead99

wrenlegs said:

But... if I hang onto it, doesn’t that mean that realistically the value is going to decrease? I may have to wait a long time for it to reach the same value again. And even if it does, then what? Sell it then? At some point I have to sell it else what’s the point in having it. 

Well, you don't know whether it will drop in value before it goes up at some point, or go up in value before it drops at some point. You might expect that over some long time periods it will be worth about the same amount of money in real terms (i.e. accounting for inflation) but over other long periods it won't be. It is an unknown. 

If you bought an investment fund or some fractional share and that went up in value, next year you will be back here saying 'shall I sell it now it has gone up , what if it goes down, maybe I should release the cash and buy something else or even buy the same thing when it gets cheaper, I don't know, what should I do'.  We don't know what you *should* do, we only know what we as individuals would do. And some of us would do it differently to others, so that won't help you. 

As Digger says, if you don't need the money, it isn't going to achieve anything for you or change your life, so you could just hold onto it in a drawer somewhere and hope it doesn't get lost or stolen, and then sell it at some point in the future instead when you have decided what you'd like to do with whatever it's worth at that point.