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What Gold Products Do Banks Accept?
In the past, every bank in the country accepted gold. However, the introduction of fiat currency (paper money) changed that standard. Now, only a few banks will accept precious metals like gold bullion coins or gold bars.
While you can always safely store bullion coins or large bars in a safe deposit box, remember that access to your precious metals will be limited to banking hours. Plus, banks don’t offer insurance for items in safe deposit boxes; you’d have to purchase insurance on your own.
That being said, in the United States, most banks will not buy precious metals, including gold. You may have some luck at commercial banks, but any savings or cooperatives will be unlikely to offer this type of service to investors.
Some Central Banks will allow customers to sell gold bars or coins, but not all. Some will let you trade gold that is legal tender — but only at face value. However, it’s important to consider the market value of your gold before trading it for face value. The best prices for gold will come from a private dealer or collector, and certain coins may give you a good deal more money than just the spot price of gold.
Of course, there may be an exception for clients who are wealthy or have a long-standing relationship with their bankers. You may want to simply ask your bank directly if you can sell gold, and in what forms. The only types of gold a bank would accept are those in coin or bullion form (i.e., gold bars), and only those with a letter of authenticity certificate.
Do Banks Accept Tarnished Gold?
If you want to sell gold to a bank, private dealers, or collectors, you might wonder if tarnish will negatively affect its cost or selling price.
Generally, the level of tarnish will not affect gold prices if you want to sell bullion. However, it’s always a good idea when buying and selling metals to clean them as much as possible to increase their value.
Conversely, if you have a rare coin collection, you may not want to clean it and risk any damage or scratches. In terms of paper currency (dollars), the Federal Reserve states that exposure to substances like mold, bodily fluids, sewage, chemicals, or tear gas is considered contamination, and the currency will require special packaging.
However, once you’ve properly researched the market price of gold and found a bank that will accept bullion or coins, you can ask if it will buy gold with some tarnish on it, and whether that will affect the cost or overall value.
Letter of Authenticity Certificate and Assaying
If you do end up selling gold bullion to a bank, you’ll need an assay or certificate of authenticity (COA).
Simply put, an assay is a method of testing whether gold from a mint actually meets the correct standards regarding gold purity and content. Assaying used to be more commonplace for testing gold bullion and gold bars when these types of metals were legal currency, but not anymore.
A certificate of authenticity is another method of gaining official certification of the quality of your gold. Typically, it comes as a seal or sticker on a piece of paper or certificate.
While it doesn’t use the same rigorous testing methods as assaying, it’s still important. It contains a stamp of approval and information about the purity level. Plus, it includes a description of the gold’s weight and fineness, as well as the minter’s or maker’s mark. Most special releases or limited edition coins will have a COA proving their authenticity and value.
Things You Need to Do Before You Sell Your Gold
Before you sell your gold (whether jewelry, gold bullion bars, or collectible coins), it’s important to spend time preparing first. It’s always a good idea to check out the current spot price of gold, so you can make informed decisions and get the right price when you sell gold to dealers or banks. The market price of gold and other precious metals fluctuates very frequently, and of course, you want to sell when the price is as high as possible.
Next, determine exactly what it is you have: is it old gold jewelry or broken pieces of scrap gold? Do you have gold coins or bullion?
Before buying and selling gold jewelry or coins, you may want to invest in an appraisal from an authorized jeweler or another business that will appraise your precious metals. You may have a rare gold coin that could fetch a high price or extra cash by selling it to private dealers or collectors, which is why you should always get an appraisal first.
If you are selling gold coins, be sure to properly store them and avoid any mishandling. Use proper sleeves and cases, or wear cotton gloves to avoid getting oil from your hands and fingers on the metal. You should always secure your gold in a safe location, be it a designated storage facility, a safe in your home, or a bank safe deposit box.
Then, ask yourself this important question: no matter how much cash you may get for your gold bars or your favorite coin collection, are you really willing to part with your gold? Holding on to your gold investment long-term could allow you to increase your profits when you do sell. Consider whether now is the right time to part with your gold.
Are There Taxes When You Sell Physical Gold to a Bank?
When buying and selling gold, it’s important to remember that any profits you make will likely be subject to the capital gains tax. The IRS uses two different categories for investors regarding this tax:
Capital Gains: Capital gains taxes apply to any profits or cash you make from selling physical assets, like gold or precious metals.
Earned Income: Your hourly pay or salary that you make for your job can impact your tax bracket and, therefore, your tax rate.
Gold is a commodity, and when you sell it (whether for investment purposes or to private dealers), the IRS subjects it to the capital gains tax. However, the amount you have to pay in taxes (your taxable rate) depends on how long you have held the gold before you sell it. Most are either at or below the rate of 28%.
Talk to your financial advisor about ways to avoid capital gains taxes. For instance, you may consider investing in paper assets instead of gold bullion or bars. For example, by investing in gold exchange-traded funds or mutual funds, you may be able to avoid the 28% tax.
Can You Sell Gold Coins to the U.S. Mint?
Technically, the U.S. Mint doesn’t sell or buy gold. Instead, it works with official distributors (for example, a private business) known as “Authorized Purchasers.”
When buying gold through the U.S. Mint website, you’re actually buying from one of these official distributors. In addition, the U.S. Mint does not accept gold coins from private individuals or dealers.
However, there is an extensive catalog on the website of different options you can choose from, including gold, silver, platinum, and palladium bullion coins. Alternatively, you can buy gold products directly through Oxford Gold Group.