Making a Melt: Selling Gold Straight to a Refinery

When you sell gold on 47^th Street, there are two ways to go.  You can sell at any one of the small gold dealers (or the larger ones), or you can go straight to a refinery that melts it for you.  Prices are often in the same neighborhood, but when you have scrap that’s not identifiable, or that you suspect is thickly plated over silver, or lots of individual pieces that would have to be tested individually, going to a refinery and “making a melt” is best. 

This means that your gold scrap is melted into a little blob, or bullion, and then analyzed electronically for gold content.  You then get paid out the exact value of your melt in cash, and you are given a copy of the elemental analysis for proof.  You should bring a few grams at least (I’m sure there’s a minimum but I think so), otherwise it’s not worth doing.

Gold Bullion

 During the process, you actually stay with your gold the entire time.  First, your scrap is weighed on a karat scale to the last 1/100^th of a pennyweight and the weight displayed on a screen that you can verify, and you get a little receipt with the weight printed on it.  You bring the gold, in the aluminum bowl it was weighed in, together with the receipt, into the room where it is melted and give it to the person doing the melt.  You hold on to your receipt.  The melt takes about 5-7 minutes and you can watch the process.  The gold is heated to about 2000 degrees F, liquefied and melts into a blob shape.  So this is nothing you can do at home!  The guy doing the melt uses huge tongs and wears a special non-flammable glove.  For privacy reasons, I’m not disclosing any names or identifiable pictures of persons, but I was chatting with the guy, and he showed me he got badly burned a day earlier on his finger.

Making the "Melt"

When the melt is done, you bring the bullion to the next room for analysis.  The weight is checked again.  Then a tiny scraping is taken out and analyzed electronically.   The analysis shows the exact % content of every metal, including silver, copper, nickel, and zinc.  This particular melt was 40.57% gold, so it averaged out to 10 karats.  I got paid $131.61 for 4.1 dwt (6.38 grams), so that’s very close to the daily gold price (within a few %).

The analysis is then printed out for you and you take to the cash register to get paid.  You also get a receipt, and now it’s done, there’s no return, no coming back if you changed your mind.  The place I go to is for businesses only, you have to provide your business name, address, and bring ID, which is photocopied.  The melt is invoiced, and I believe it is kept for 24 hrs before it gets shipped out.  All this helps reduce the chances that the gold is stolen, but of course it doesn’t completely eradicate it.

Guest Blog: The Search for a Classic OEC

Guest Entry by Anya

If you read Yvonne’s entry on Vintage diamonds – OMCs (Old Mine Cuts) and OECs (Old European Cuts) – you will have noticed that she called them the only “truly rare” diamonds on the market today. That is because diamonds with this type of cut are no longer mass produced. Old-cut aficionados like me have to get creative to find the perfect stone.  Here are some tips on how to go about it.

There are several places one can look for a vintage diamond. Some vendors specialize in selling old stones, such as Jewels By Erica Grace and Old World Diamonds. Then there are vendors who specialize in cutting modern, perfected versions of OMCs and OECs, such as the people at Good Old Gold; but newly cut vintage-style stones are usually sold at a premium. Old cuts can also be found in estate and vintage jewelry shops, though nice stones are usually few and far in between. Lastly, an educated buyer can try her luck on eBay.

Buying through eBay has its risks and rewards. It’s risky because most sellers are not very good at taking photos of their diamonds, the color and clarity grades are often  overestimated, and the return policies aren’t always straightforward.  But the reward is finding a really good deal on a nice stone, if you know how to look.

In my case, I wanted to find an OEC that would be at least 7mm in diameter, one that would face-up white (most OECs available today tend to be on the warmer side, probably because the whiter stones were re-cut into Modern Round Brilliants), eye-clean (anywhere from VS2-SI2), and with the classic OEC characteristics of a small table, high crown, open culet and neat kozibe effect (when the open culet reflects around the center of the diamond). Lastly, I wanted classic OEC faceting that creates a flower or snowflake-like pattern in the center, and beautiful petal-like facets on the periphery. And all of this on a tight budget!

After weeks of searching, I found a potential candidate. The photos weren’t great, most of them taken at an angle and with a flash. But the description read well, there was a lab appraisal (you can’t really trust the specs from an appraisal, but it’s a good start) that indicated that the stone met my requirements. Most importantly, the seller was willing to give me a several-day inspection and return period.

When I received the stone, I checked for several characteristics. The most important thing is how well a diamond is cut. I  looked for any outright negative optic qualities, like the much-dreaded fisheye effect (usually seen in shallow stones, this is when a reflection of the girdle is visible inside the stone, creating a kind of hazy circle, or “fish eye,” around the table) or nailhead (when the central facets are dark and have no light play). Then I checked for general “wonkiness” or poor symmetry. Lastly, I used my 30x loupe to go over the diamond (which was set into a ring) as closely as possible to check for chips or cracks.

Once those were ruled out and I was comfortable with the quality of the diamond’s cut, I concentrated on the color. The appraisal stated the stone was K-L. Having seen OECs in whiter and lower colors, I judged the appraisal to be close to accurate.  Just to be safe, I thought maybe the stone could be a bit lower – perhaps L-M as opposed to K-L. OECs are known for facing up white in settings.

Once I decided that I would keep the ring, I immediately shipped it to Yvonne so she could run it by the guys in the NYC diamond district. The stone needed to be unset, polished (to clean up the tiny nicks on girdle after years of wear and tear), and set into a new setting. A great big thanks to Yvonne for helping me out with this! Not every eBayer has this kind access to the professionals in the diamond district.

eBay Photo of Anya's Ring

When the stone was loose, it was weighed, and turned out to be quite a bit lighter than the appraisal estimated. The estimated weight was 1.85ct, but the real weight only 1.78ct. Polishing the stone took a few points off, so the final weight clocked in at 1.75ct, and around 7.5mm in diameter. A pretty good size for me!

An additional step I could have taken at this point was to send the diamond to get graded by one of the major labs. A GIA certificate would have been great, but it takes at least three weeks and I was impatient to have the ring on my finger, so the stone remains un-certified for now. If I ever should want to sell this stone, a cert will definitely be a must.  A GIA cert would be best, since that’s the most trusted laboratory for diamonds.

Another thank you to Yvonne for setting the stone into my favorite 6-prong yellow gold setting, and shipping it back to me. I now have it on my finger, and can’t stop admiring it! 

The Finished Product