Drop in Gold Prices Fuels Online Cash for Gold Companies

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Does the recent drop in gold prices mean an end to local cash for gold shops? Top 7 announces likely industry results on changes in the industry.

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It isn’t about being desperate for money... You made an investment... Now is a great time to get paid...

Gold has been on a historic run for years. Prices have continued to increase (although at less substantial rates) the past few years, and it has preserved its reputation as one of the most consistent investments. It spawned the opening of “cash for gold” stores around the country. But back in mid-April, gold prices dropped at a historic rate. Does that mean the end of “cash for gold” shops?

Does a 20% drop in gold prices mean the man spinning the gold sign on the corner is going to be out of a job soon? Unlikely, says Hugh Downey, owner of Top7CashforGold.com and expert on the industry.

“Most of these stores offering cash for your gold are offering between 25-50% of the actual value of that gold. The margins are huge,” explains Hugh. “Will they make a little less money? Sure. But their profit certainly hasn’t evaporated.”

It’s those kinds of numbers that make consumers hate gold buying companies.

A more likely reason for decreasing business would be due to public perception of lower gold prices. When prices drop, people feel the need for them to wait for them to return to their previous values if they don’t need the cash immediately. Less business is more about human psychology than it is about liquidating assets.

On the other hand, a drop in gold prices could end up being good news for online gold buyers.

“Online buyers are looking at the daily price of gold. They’re of course taking a few percentages as an intermediary, but look at it as a small commission for brokering the sale rather than gouging consumers who don’t really know what their gold is worth,” continued Downey of Top7CashforGold.com, a website dedicated to publishing online gold buyer prices.

Since payouts are based on the daily price of gold, they change as the price of gold changes.

“We view ourselves as more of a way to quickly and easily convert valuable assets you aren’t using into cash that you can,” said Terry Bechakas, owner of JustSellGold.com, the top rated company in Top7CashforGold.com’s online gold test. “It isn’t about being desperate for money. It’s about cashing in your chips when you’re ahead. You made an investment in holding on to that old jewelry, and now is a great time to get paid off for your investment.”

While the drop in the price of gold was good for consumers who had sold right beforehand, these large companies holding on to their items weren’t so lucky. Reputable online companies typically hold gold for between 15-30 days to ensure the consumer is happy with the transaction. Companies, like JustSellGold.com, forced to hold gold during these periods is likely taking a short-term loss.

So will your local cash for gold shop close its doors? Not likely. But consumers needing to sell gold should always be able to find great deals with reputable companies online after doing a little research.

For more information on online cash for gold company ratings and reviews, view http://www.Top7CashforGold.com.

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