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Avoid the gold-buying hype

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By Jerry Jordan
Managing Editor
with permission from the Examiner

The Ohio Valley Gold and Silver Refinery is back in Southeast Texas hoping to separate local residents from the treasures hidden in their closets, drawers and jewelry boxes. But as reported in the past, the offers of “economic stimulus” have yet to live up to the hype promised in the company’s advertising.

THR & Associates – the parent company of Ohio Valley Gold and Silver Refinery, as well as Treasure Hunters Roadshow, International Coin Collectors Association, International Vintage Guitar Association, Cash for Tools, International Military Collectors Association, International Vintage Guitar Collectors Association, Fine Arts Collectors Association and the National Guns Collectors Association – is one of the largest itinerant gold buyers traveling the country. Using its various assumed names, THR & Associates sets up shop at hotels, meeting halls and other locations after taking out full-page ads in local newspapers and on the radio and television. Disguised as legitimate news stories, but with small type at the top of the page declaring it a “paid advertisement,“ the company hopes residents will bring in their gold, silver, and platinum to sell.

The Examiner has been investigating THR & Associates for more than a year and is set to publish a follow-up story to its original works from January and March 2010, which was recognized with three awards from the Numismatic Literary Guild, including being presented with the James L. Miller Award for the best overall article in the field. The newspaper has repeatedly shown THR and its affiliates offered pennies on the dollar for items brought to its shows. At more than a dozen shows in five states, the newspaper has repeatedly brought in collectible gold and silver coins, 14k gold chains, Rolex watches, sterling silver flatware and other items only to be told it was worth a fraction of its actual value. THR’s so-called “experts” also could not determine the difference between a proof Morgan silver dollar with eight tail feathers below the eagle on the reverse and a common Morgan silver dollar. The experts also couldn’t tell when a fake gold coin was presented to them for consideration.

Aside from the disparity with rare collectible coins, the newspaper’s investigation also found that one of the areas THR was low-balling its offers on was what the company terms as “scrap gold.” THR would have potential sellers believe that “scrap gold” has less value because it is often comprised of broken necklaces or rings. In actuality the gold still maintains value based on its precious metal content regardless of condition, which in the case of gold was about $1,375 per ounce at the market’s close on Feb. 16, 2011. The closing market price for silver was $30.65 per ounce on Feb. 16.

But an ad from THR that was printed in the Beaumont Enterprise on Feb. 15, 2011, states gold “is currently trading at over $1,200 per ounce and silver is just under $19 per ounce.” Technically, it would be true that gold is currently trading above $1,200 but why was the price of silver listed more than $10 per ounce below its current value? And the advertisement published in the Beaumont Enterprise specifically for the Beaumont market is identical to the advertisement targeting citizens in Grenada, Miss. The only differences between the two ads are the photos used and the fact that -- although the wording is exactly the same – they are written by a different “staff writer.” Christina Butler supposedly wrote the ad in Mississippi and David Morgan is listed as the author of the ad in Beaumont.

When asked about the discrepancy and the prices listed for silver and gold, the manager of the show in Beaumont declined to comment.

In an effort to educate residents on the value of their items, The Examiner spoke with Mike Fuljenz, who provided the following breakdown regarding how to determine the value of the gold or silver content of an item.

“Reputable dealers pay a higher percentage of melt or bullion value, typically 60 percent to 80 percent,” Fuljenz said. “Many hotel buyers tested pay as low as 10 percent and rarely above 50 percent without negotiation. And the mail-in buyers typically pay about the same as hotel buyers, so, don’t expect more.”

Fuljenz said the formulas used by hotel buyers to explain their offers for gold or silver might seem complex, but knowing the raw gold or silver content of an item is the first step to breaking down its melt or bullion value.

“A lot of these hotel buyers purchase items to melt them down for their gold content. One troy ounce equals 31.1 grams of 24 karat pure gold,” Fuljenz said. “Many hotel buyers convert troy ounces into pennyweights, which can also sound confusing but one troy ounce equals 20 pennyweights.”

18k gold is 75 percent pure
14k gold is 58.33 percent pure
10k gold is 41.67 percent pure

Fuljenz added that sterling silver is 92.5 percent pure.

“If you have a 14k gold chain that weighs 10 grams, then you would take 10 and divide it by 31.1, which equals .32 troy ounces,” Fuljenz said. “Then you would take .32 and multiply that number by .5833 to obtain the amount of pure gold in the chain. Once you have that amount, which .18 troy ounces, you can multiply that number by the current spot price of gold, which today is $1,375. The gold content in the chain is $247. You can substitute the numbers for your items in the formula above in order to obtain its value before selling. As I previously stated, reputable dealers in Beaumont and in Houston pay between 60 percent and 80 percent of that amount. The silver content is calculated in the same manner and is paid at the same rate by reputable dealers.”

Fuljenz said people who have old silver dollars might not realize they contain 90 percent silver and are currently being bought for more than $20 apiece by reputable dealers.

When The Examiner tested THR and its affiliates at a recent show, the company offered between $8 and $10 per coin. Other hotel gold buyers tested by the newspaper also offered $10 per silver dollar.

There is also a Web site – http://www.coinflation.com/ – available to help people determine the value of the metal in their coins. But the Web site does not indicate if a coin has a value beyond its gold value, which could be worth hundreds or even thousands of dollars more to collectors.

A lot of older coins have a numismatic value that is above the value of metal in the coin. Because some older coins are more common than others it can be difficult to know the numismatic or collectible value. Fuljenz said that is where thorough research or a reputable coin dealer is needed to determine the collectible value.

“On rare collectibles, hotel buyers often don’t recognize rarities,” he said. “We recently offered a proof Morgan silver dollar that was graded by one of the leading coin grading service PCGS (Professional Coin Grading Service) to three different hotel buyers. None of them recognized it as a proof and offered between $10 and $30 for it. Real experts offered $1,000 for the coin.”

Fuljenz also advised people to be wary of scales used by traveling gold buyers because many of those tested by The Examiner were not certified by the Texas Department of Agriculture as required by state law.

“The easiest way to determine if their scales are accurate is to take a brand new nickel and have them weigh it,” Fuljenz said. “If it doesn’t weigh between 4.9 grams and 5 grams, then just walk away.”

Although the BBB advises people to utilize reputable local dealers when selling precious metals, should someone decide to sell to a traveling gold buyer, they are advised to obtain a receipt – something that is not offered by THR or its affiliates. The company is also not accredited by the BBB.

Additionally, Fuljenz said The Examiner’s investigations into itinerant gold buyers were used by writers with the Numismatic Literary Guild to help implement changes in the U.S. Federal Trade Commission’s (FTC) consumer protection brochure regarding the need to obtain a receipt when selling precious metals.

Jerry Jordan can be reached at (409) 498-1074, or at This email address is being protected from spambots. You need JavaScript enabled to view it.