Need Fast Money? Choose Pawn or Sell Gold?

gold

Need Fast Money? Choose Pawn or Sell Gold?

Gold is a luxury item for everyone. Because gold can be an investment medium, especially gold bullion. And for women, gold jewelry is one of the jewelry that is considered capable of beautifying their appearance.

Now for investors to buy gold for one of three reasons: a safe selling value, a safe place, or direct investment. Which is the best reason in your opinion? Research says that gold is indeed the asset that has the best value against stock market crashes.

So, gold is an investment that offsets losses in other asset classes. Many investors buy gold to hedge against falling currencies, usually the US dollar. When a currency falls, it creates higher import prices and inflation. As a result, gold is also a defense against inflation. Still remember how when Indonesia experienced the monetary crisis in 1998, the price of gold soared, the only asset that remained valuable. Even in the world of pawnshops, gold pawns are one of the most desirable and safest.

For example, the price of gold more than doubled between 2002 and 2007, from USD 347.20 to USD 833.75 per ounce. That’s because the dollar’s value as measured against the euro fell 40% over the same period. So, it’s natural that when the dollar goes down, the price of gold goes down, and this is a good time to shop for gold. Meanwhile, if you want to get big profits, then selling gold when the dollar rises and the price of gold rises is the best way. But keep in mind, a good gold as a means of investment is gold bullion, not gold jewelry.

For many people owning gold is considered an investment. This idea has been around for a long time. Gold is a publicly traded asset and has a high resale value. Like stocks, their value always fluctuates too. Gold is also traded all the time in the market. The sale of gold also knows no season. Therefore, gold is believed to be a valuable item whose value is stable at any time. When we need cash suddenly such as for emergency needs, gold can be a savior. Just choose to pawn or sell gold. Each has its advantages and disadvantages.

The purpose of people buying gold is indeed diverse. Some buy it just for fun as jewelry, some buy it for investment or savings. In the long term this can be said as an investment too. Likewise during an emergency. Selling gold when the price is rising is also a simple concept of investing. If the price is going down, we can pawn it at the pawnshop or in Islamic banks.

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There are always human needs that deviate from the plan. Whether it’s primary, secondary or even tertiary needs. These needs are generally sudden and emergency. For example, you suddenly need business capital or because you have been laid off, you can also pay for treatment. Money to meet those needs would be a real headache if it wasn’t in our plans. But if we have gold instead of an emergency fund this can make it much easier. Then what should be done with the gold? Pawn or sell gold? This question might be answered if we know what are the advantages and disadvantages of pawning or selling gold. Let’s see the explanation below!

Advantages of Pawn Gold

If you are experiencing financial problems or need funds suddenly, and you have assets in the form of gold, then you can easily pawn the gold. Pawning gold can be one solution to get cash faster. We can pawn gold at Pawnshops or Sharia Pawnshops. Pawning gold is done if we are still not willing to sell the gold. The advantages of pawning gold include:

  • The gold owned is only used as collateral to the Pegadaian and does not actually become the property of the Pegadaian. When we can pay off the debt, the gold used as collateral can be taken and remain ours.
  • The process of disbursing funds by pawning gold at Pegadaian also tends to be faster than other places. In just a few minutes the funds can be in our hands.
  • The pawn value of gold is also higher in value when compared to other items that can be pawned because of its definite value in the market. So if you want more funds, it’s better to pawn gold than other items.
  • Avoid debt bondage. When you need an emergency fund, gold is pawned as collateral. If you can’t pay the debt, then gold is used as a means of payment.
  • The pawn process is not like selling gold, so it does not require a proof of purchase of gold.
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Lack of Gold Pawn

As long as there are advantages there will always be disadvantages. Here are the drawbacks if we pawn the gold.

  • If gold is in the form of jewelry, it cannot be used for a while because it is in the hands of the pawnshop
  • The value of the mortgage obtained may not be as high as the purchase value of gold. It could be that we pawn it when the value of gold drops so that the value of the pledge that we get also goes down. Pegadaian usually does provide loans below the estimated price.
  • The gold will be confiscated and become the property of the Pegadaian if we cannot pay according to the given deadline. And the Pegadaian will conduct an open auction for gold that is not redeemed by the owner.
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When pawning gold, it would be better if we know the weight of the gold and the value of the gold when it will be pawned. This will give us an estimate of the amount of funds we can get. Keep in mind that how much we will receive for gold is also based on how pure the gold is. The carat of gold is what measures its purity. Pure gold is 24 karat and is so soft that it can be bitten. If the gold we have is in the form of jewelry, then it will most likely be mixed with other metals. The question is how many other metals are mixed. Most gold, whether it is in the form of jewelry or ingots, has the carat marked on the gold. On the ring, usually on the inside. How pure the gold is will determine the value of the gold so it is important to know that.

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