In a fluctuating gold market, South African sellers must navigate potential pitfalls when liquidating their gold assets. With rising prices attracting unwarranted buyers, this guide offers essential tips for ensuring transparency, fair pricing and protection against fraud, helping you make informed decisions in a risky landscape. As economic pressures continue to squeeze consumers, a dense market for “cash for gold” buyers – from reputable national chains to unregulated, fly-by-night operators – has flourished.
The stakes are high: navigating this opaque market can mean the difference between getting a fair price for a family asset and being short-changed. Gold recycling, primarily from old jewellery, is a significant component of global supply, typically accounting for about 1,400 tonnes annually. This secondary market swells during price rallies and periods of financial distress.
As John Reade, senior market strategist at the World Gold Council (WGC), explains, gold price cycles are the primary motivators: a rapidly rising price pushes gold into the news, prompting people to sell. Reade notes that, for consumers, this selling is often linked to urgent financial necessity. “Consumer distress is a part of the increased motivation to sell gold back as well,” he says.
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While global recycling supply has been muted despite record US dollar prices – partly because many anticipate prices will climb higher – local economic conditions and currency weakness in emerging markets like South Africa also play a crucial role. Reade cites India as an example, where people increasingly use gold jewellery as collateral for loans instead of selling it outright, securing liquidity when traditional finance is inaccessible. This underscores gold’s role as a strategic, liquid asset in times of need.
The WGC’sGold Demand Trends Q3 2025report confirms that high prices simultaneously depress new gold consumption and stimulate liquidation. It notes that global jewellery demand fell sharply this year, with a 19% year-on-year decline in the third quarter. To establish a baseline for legitimate trade, national chains like Cash Converters provide a model of strict, transparent processes anchored in regulatory compliance.
First, the item’s purity (9ct, 18ct, etc) is identified by checking the stamp mark. This is followed by an acid test to verify quality and confirm the piece is not plated. A tiny scratch is made on a testing stone, which is then exposed to a specific acid solution; the reaction indicates whether the stated purity is accurate.
The entire process takes place in front of the customer. “Transparency is very, very important in this process,” says Kobie Koekemoer, national operations manager at Cash Converters. The final calculation is based on the verified carat, measured weight and the live spot price of gold for that day.
Nicole Thomson, group franchise sales and marketing director at Cash Converters, emphasises that the process also creates a safety barrier: “Our process and our system make it difficult for criminals to sell to us because they don’t want their details on the system.” Reputable buyers follow Know Your Customer principles: they verify identification, scan and store the customer’s details and often photograph both seller and item. This verification process deters criminals, prevents the circulation of stolen goods and maintains the chain of ownership required by refiners.
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