Warning for sellers amid rollercoaster gold and silver prices

Brian Leonard did not expect to be queueing outside of Hatton Garden Metals last week, but he was happy to wait anyway.

Like many others, he was at the family-run gold dealership in London to sell some precious metal - in his case a silver plate which had been "lying around the house".

Gold, silver, and platinum prices were near an all-time high when Brian was selling, but last Friday the bubble in the market burst and prices slumped.

While precious metals remain much more valuable than this time last year, the frenzy shows how volatile commodities trading can be, with experts warning would-be sellers to be careful of being ripped off.

Gold and other precious metals are seen by many investors as a safe haven to store wealth in unstable economic times. This centuries old thinking is partly to do with how rare these metals are and how there is only a limited amount of them in the world.

Over the past year the price of gold soared alongside US President Donald Trump's attempts to take over Greenland and frantic trade policy. Previous surges have happened alongside the 1980 oil crisis, the 2008 financial crisis, and the 2020 Covid pandemic.

But the more recent slump in prices began late last week, after Trump made Kevin Warsh his pick for the chair of the Federal Reserve helped give investors some certainty. Deutsche Bank said this was "the clear catalyst for Friday's sell-off", which continued into Monday as prices fell further.

Other analysts have said it could simply have been a case of the market adjusting after precious metals' value shot up.

Gold and other precious metals trade in a very liquid market - that is to say, there are lots of people buying and selling all over the world at any given time.

This means their prices can quickly change, as has happened over the last week. When markets move up and down like that, some people can end up selling too low or buying too high.

To avoid this, personal finance expert Fanny Snaith recommends doing due diligence and getting some no obligation free valuations rather than selling jewellery in response to "just some advert".

She also says sellers should consider the price of the jewellery might not just be the metal but the stones and design as well. This is why research and more than one valuation matters.

Financial advice charity National Debtline says anyone selling jewellery - or anything else - to pay off debt should make sure they own it first.

A person is not the owner of jewellery they are making payments for under a lease, rental, hire-purchase or bill of sale agreement.

The charity says in some cases, a lender may agree to give you permission for a sale, but you wouldn't receive the full value of the item.

If a piece of jewellery is jointly owned by two people, the permission of both owners is usually needed in order to sell it.

The charity also recommends looking into different ways of selling jewellery to find the best way to sell the item.

The charity says it is important to consider the downsides to selling as well as the upsides.

The big upside is the ability to at least partially pay off creditors. But selling jewellery now, it points out, also means no longer having that asset for the future, including retirement or as a family inheritance.

"If you have financial emergencies in the future, you may not have enough money or assets to deal with them," the charity adds.

For jewellers on the ground, such as Harriet Kelsall, the founder of a bespoke jewellery business, the effect of all of this on items such as wedding rings has been "complicated".

On the one hand, she said she is seeing some customers reduce the amount of gold they are requesting in rings so they can pay the same price for the same style of ring.

Meanwhile, those who can afford to pay have gone in the other direction by looking to display what they have bought.

"Three years ago, everything we were making was white metal, people liked that low key, less bright yellow look. I think customers thought it was underplaying it."

"And at the moment, it's reversed. Suddenly, we're seeing a big trend arriving for quite heavy, yellow-gold jewellery," she said.

One such owner of heavy gold jewellery is Brian Leonard. In his case, it's a watch he used to wear to work.

He could have sold it last week at gold's peak, but he decided not to, keeping it as "a memory of better days". It's a reminder that not all jewellery can be valued in pounds and pence.

Additional reporting by Esyllt Carr