Three Ways to Make Money in Precious Metal Recycling
“How do I make a profit by investing in precious metals?” seems like a pretty simple question. But even though it’s a simple question to ask, it is a difficult one to answer.
Why? Because there are a number of ways to make a profit when investing in precious metals. In today’s post, we will look at three of them.
Strategy One: Buy Metal for a Low Price, Sell It for More
This is the most basic strategy for making money in precious metals, and it is how we help many of our clients make a lot of money. To use this strategy, you buy precious metal scrap for less money than the value of the precious metals it contains, then sell it at current trading prices.
Here are some examples (note that these examples, and all that follow, are for illustrative purposes and not strictly based on past transactions conducted by our company) . . .
Client A spends $250 to buy a batch of scrapped laboratory equipment. We test it, determine that the platinum it contains is worth $450, then we refine that platinum, sell it, and send our client a check for $450. He makes $200 on the transaction.
Client B buys a batch of old gold-filled jewelry and eyeglass frames for $100. We test it, find that it contains $150 worth of gold, and send her a check for $150. She makes $50 on the transaction.
Strategy Two: Bet on Rising Trading Prices
This is another simple, reliable way to make money trading precious metals. To use this strategy, you hold a quantity of a precious metal, wait for its trading price to rise, then sell it. Note that for this strategy to work, the trading price of a metal has to increase.
Again, here are some illustrations:
Client C has us extract $1,200 worth of gold from a pile of dental scrap he sends us. Then we sell it for $1,500 a year later, because the trading price has increased that much. He makes $300 on this transaction.
Client D has us extract $150 worth of silver from a pile of industrial scrap. We hold it for him and sell it for $200 a year later, because the trading price has increased. He made $50 on the deal.
Strategy Three: Cash in on Collectible Value
Some items made of gold, silver, platinum and other precious metals are valuable because they contain quantities of those metals. Other items take on additional value because they have collectible value too, meaning that people are willing to pay more for them than just their metallic value.
Again, here are some examples:
Client E buys three Gorham silver tablespoons at an antique store for $50. He then sells them to a collector for $80. He therefore makes $30 on his investment. And the interesting thing is, the silver those spoons contained was worth only about $10. He had made money by trading on the collectible value of the spoons, not their metallic value.
Client F buys an antique Breguet wristwatch with an 18K gold case at an estate sale for $2,000 and sells it to a collector the next week for $4,000. His profit is therefore $2,000. Note that the watch case contained less than $500 worth of gold. He made money because he was trading on the watch’s collectible value, not on the amount of gold it contained.
To Define Your Best Profit-Making Strategy, Call Specialty Metals Today
As we have discussed in today’s article, there are a number of ways to make profit from investing in precious metals. What strategy should you use? And what kind of precious metal items are you trading in? To get advice from our precious metal consultants, call Specialty Metals Smelters and Refiners at 800-426-2344.