Historically, we have often been asked about the valuation of jewelry and coins as part of the equitable distribution process. This has never been a very interesting topic over the years as, in most cases, the mark-up on these personal effects is so high that there is often very little value left after the appraiser finishes charging his or her fee. In particular, with the average $500-$1000 piece of jewelry, it is not uncommon for the mark-up to be 10x the wholesale price of the piece involved. This is reflected in a classic dilemma. Take grandpa’s pocket watch to the appraiser for an insurance appraisal and it may be valued at $1,500. Ask the same jeweler for a quote to buy it, and the number could be one-third or less of the insurance value.

This general conclusion is shifting beneath us and merits some further consideration because of recent trends in commodity prices. Gold as a commodity has historically traded in the $300-$400 per ounce range. It remained in that window from January, 2000 pretty much through July, 2004. Since that date the rise in the price of the commodity started upward marching to $600 an ounce by July, 2006. For the next year, it traded in the $600-700 range. But since that date it has taken off to where it trades at more than $1,000 per ounce as this article is written.

Silver and platinum have risen even more precipitously. Silver was the stepchild of the commodities business since the 1980s when the Hunt Family in Texas tried to corner the market and failed. It remained in the $6.00 per ounce range for almost 20 years. But January, 2004 marked a turning point. Silver shifted into a $6.00-8.00 commodity. And two years later in January, 2006, it began a long steep rise that takes it to its current value of $20.42 (3/14/08). Platinum worked in a $400-600 an ounce range from the early 1990s through 2002. But with the arrival to 2003 it rose very steadily to $1300 an ounce by the third quarter of 2007. Since that time, the metal has rocketed off the chart to $2,150 today. That would yield an annual return of 160% if sustained.

So what does this mean to those of us who have granny’s collection of silver service for 12 or $100 worth of pre-1964 coins. It means that these objects may have real value even without considering the artistic consideration of whether the pattern is Williamsburg Shell or something else. If you bought a sterling golf tankard for $100 ten years ago, its smelting value might have been $40 (8oz x $5.00 an ounce). Today that same tankard is worth $152 even if the scrap dealer just throws it in the smelter to melt and sell. As noted above, these kinds of goods have high mark-ups and usually trade at a fraction of retail. But because the metal used is now so valuable, it may be very worthwhile to consider making the investment in an appraisal.

Bear in mind a couple of details that make all the difference. Gold found in retail goods in the US it typically 10, 14, or 18 carat. Gold is usually marked with its composition. This means it is 42%-75% gold and otherwise a composite of other hard metals. Sterling silver is 92.5% raw material so it is typically close to the commodity price. But, one needs to know the difference between silver and silverplate, as the latter is really another metal (typically copper or brass) plated with a microscopic coating of silver. So, unless the piece has hallmarks or otherwise has the word “sterling” embossed in the metal, chances are you are holding a piece of copper or brass, dressed up to look like sterling. It could still be valuable but that would be as art and not metal.