The MGS Precious Metals Blog

Manhattan Gold & Silver is an industry leader in precious metal pricing and refining with more than 30 years of experience. During our time in the business, we’ve found the topic of precious metals to be a vast and interesting one. Here on our precious metals blog, we write in-depth posts about the science of precious metal refining, historical and modern uses for precious metals, market news, and much more. Subscribe to our RSS feed to stay current, and discuss the latest posts on our Facebook page.

How Do Pawnbrokers Work?

December 10, 2019 07:00
How Do Pawnbrokers Work?

How do pawnbrokers work? Most people have a vague idea: you bring in something of value and a pawnbroker offers you a loan in exchange. The pawnbroker then keeps your item until you repay the loan—with finance fees.

But before you consider paying off a debt with antiques recovered from your attic, it’s important to understand how pawnshop transactions work.

While the concept is simple, there are still plenty of misconceptions about the industry. Let’s demystify it.

How Pawnshop Transactions Work

Pawnbrokers are small businesses that accept items as collateral for short term loans for anyone who is unable to secure one through a bank or traditional lender. They are licensed on national, state and local levels.

Once specifics are agreed upon, a pawn ticket is issued with the terms of the loan, including fees, expiration date and the item’s description.

If the loan amount is repaid in full--including fees--before the deadline, the item is returned. If the loan is not repaid on time, however, the pawnshop keeps the items. Unlike traditional loans, there are no repercussions for an unpaid load—besides the loss of items. The loan doesn’t go into collection or impact credit reports.

According to the National Pawnbrokers Association, about 80 percent of all customers reclaim their items.

While pawn shops do sell items that have been forfeited by borrowers, loans offer much higher profitability because of the fees they generate. While interest rates vary state-to-state, pawnshops can charge up to an additional 20 percent a month for service fees.

How Pawnshops Evaluate Items

Before a pawn shop buys an item, they will first research what similar items are selling for on the second-hand marketplace. According to Pawn Nerd, they typically offer borrowers about 40 to 60 percent of the item’s current used resale value. That 60 to 40 percent markup will be the pawnbroker’s profit if the item is forfeited.

Pawnshop Loans: Pros and Cons

While the cost of taking out a pawnshop loan may seem steep, consider the pros:

  • The loans are quick and immediate. You’ll usually get your money faster through a pawn shop than an online loan. If you need to come up with a couple hundred dollars fast, it’s a good option.
  • Burrowers aren’t subject to credit checks. While you will need a government issued picture ID for your pawn transaction, no credit check is needed.
  • There is no impact to the borrower’s credit rating. That means your pawnshop loan won’t affect traditional bank loans and interest rates.
  • The interest is per borrowed period. A pawnbroker will generally let you redeem your item at any time--and only charge interest for the period you have borrowed the money.

The downside of pawning is the amount borrowed can’t exceed the percentage of the item’s value. If, for example, you have some jewelry worth $500, you might only be able to borrow $250.

What Do Pawnbrokers Do with Scrap Metal?

Pawnshops would much rather borrowers pay back their loans than forfeit items. After all, a forfeited item can’t be pawned again, and that repeat business is lost for good. And the profits generated by loans far outweigh the profits from selling items.

But that doesn’t mean it doesn’t happen. What do pawnbrokers do with accumulated scrap metal from unclaimed jewelry, for example? Most pawnshops just sell their scrap metal to refiners.

Manhattan Gold & Silver services industries that use gold, silver, platinum or palladium through the course of their own business, including pawnbrokers. After melting, processing and testing, the precious metal can be converted to into bars, casting grain or a quick payout.

According to the NPA, nearly 30 million Americans routinely rely on pawnshop loans. They are cheaper than payday or title loans and ideal for anyone who need cash fast without impacting their credit.

What's Behind the Demand for Silver?

October 15, 2019 07:00
What's Behind the Demand for Silver?

It’s hard to imagine there was a time when silver hit $49 per ounce. While the white metal hasn’t climbed that high since April 2011, there has been some speculation silver could rise past $20 per ounce in 2019. What exactly determines the price of silver? One factor, like most commodities, is supply and demand.

Most silver mines aren’t profitable when silver prices drop below $20—where they have been for some time. As a result, a number of silver companies have had to put their mines in maintenance mode or halt mine expansion altogether. This has caused a decrease in global silver production.

Meanwhile, the Silver Institute reports global silver demand rose 4 percent to 1 billion ounces in 2018--the first time demand has risen year-over-year since 2015. The demand, coupled with a decrease in supply, has caused prices to rise.

When it comes to silver, what is creating the demand? Silver is used in investments, jewelry, and electrical applications, to name a few. Here are some of the top applications for silver:

Silver in Electronics

Silver is highly reliable and durable. In the electrical field, silver is often used in the form of silver paste. Its electrical conductivity makes it an ideal choice for electronics such as:

  • Printed circuit boards
  • TV screens
  • Phones
  • Microwave ovens
  • Keyboards

Consumer demand for electronics isn’t likely to decrease anytime soon.

Silver in Energy

Because it has the highest electrical and thermal conductivity of all metals, silver is vital for the manufacturing of solar panels.

In solar cells, silver powder gets turned into a paste that contains silver particles, which is then loaded onto a silicon wafer. When light strikes the silicon, electrons are set into motion, initiating a flow of electricity for either immediate use or to be stored in batteries.

Many experts estimate that solar power could become the world's largest source of electricity by 2050, which could have an impact on the global price of silver.

Silver in Medicine

Silver has been used as an antimicrobial agent by civilizations for thousands of years. And did you know ship captains used to toss silver coins into storage barrels to keep drinking water fresh?

In hospitals today, silver is used in bandages to treat burn victims and destroy pathogenic microbes on catheters. Coating medical equipment with small amounts of silver has also shown to prevent the spread of pathogens.

Its antibiotic property is what has given silver a vital role in medicine. The presence of antibiotic-resistant superbugs has only increased the demand for silver.

Silver in Silverware and Jewelry

Silver cutlery and rings date back to the 14th Century. Although it can tarnish, silver is less costly than gold, making it a standard choice. It also resists oxidation and corrosion.

Because it’s pliable, silver is also easy to hammer and mold into different forms and shapes. The Silver Institute predicts silver jewelry will remain the most popular alternative to gold in the United States, with demand expected to grow in 2019.

Other Silver Uses

Other uses for silver include:

  • Awards and medals
  • Photography
  • Mirrors and glass
  • Chemical production
  • Coins and investments

Thinking of investing in silver? Viewing the silver price history can help you to better understand the market surrounding this precious metal. Our customizable silver price charts provides records of silver price history based on fixings published by the London Bullion Market Association (LBMA).

How to Sell Estate Bullion & Coins

September 10, 2019 07:00
How to Sell Estate Bullion & Coins

When people choose to invest in physical precious metals like gold bullion or silver coins, they’re often planning for the future--not just their own, but their family’s as well. In some cases, these investors plan to include precious metals as part of the estate they will pass down to their heirs. Unfortunately, although precious metals are extremely valuable, liquidating physical investments like bullion for their maximum value in legal tender can be easier said than done.

We understand how stressful it can be to deal with precious metal items inherited through an estate. Estimating the value of each item and finding buyers who will pay fairly for them can easily start to feel like a full-time job. When it comes to selling precious metals, honesty and integrity are at a premium. There is constant demand for precious metals--so how do you choose a buyer you can trust?

When it comes to buying estate pieces like bullion bars, coins, and jewelry, Manhattan Gold & Silver proudly stands apart from estate liquidators and other precious metal buyers. During our 30+ years in business, our one-on-one customer service and flexibility in handling lots of any size has built a substantial base of clients who keep coming back for our fast and fair transactions. No matter what types of precious metal items you need to sell, we offer each of our clients the following:

Experience you can trust – MGS has been family-owned and operated since 1985

Maximum melt value – Generally, most consumer scrap jewelry sells for 70-80% of the melt value for their precious metal content. At MGS, we’re proud to pay our clients 98-99% of their precious metal’s melt value as set daily by the London Fixing.

Transparency – Customers can watch their precious metal scrap go through the entire process of being weighed, melted, and tested

Customer Service – We maintain an A+ rating from the Better Business Bureau

Speed – most transactions (even those from large estates) are processed and paid out the same day

Full ServiceWe also sell bullion for those who want to re-invest a portion of their payout

Flexibility – No lot is too large or too small. We buy almost everything containing gold, platinum, palladium, and silver (except for electronic devices and alluvial material). Some examples of items we accept from estate sales include:

  • Bullion bars and coins
  • Watches, chains, and jewelry--in ANY condition
  • Silver flatware
  • Sculptures, metalwork, and more

If you’re not sure of the precious metal content of items you have, we can find out for you! MGS has more than 30 years of experience testing items for precious metal content and purity. We also offer ultrasonic testingwhich is prefect for authenticating bullion and coins. The testimonials from our customers speak volumes, but allow us to prove it to you. Contact us today to learn how we can assist you with estate liquidation.

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