Minnesotans join rush to cash in gold jewelryby Martin Moylan, Minnesota Public Radio
St. Paul, Minn. — It's hard to escape the pitches from jewelers, pawn shops, and other businesses eager to buy unwanted gold. Especially, the catchy ads from the Gold Guys.
Last year, the Gold Guys said they bought gold from some 33,000 Minnesotans. All that gold, platinum and silver was worth about $10 million when melted down at a refinery.
The price of gold has reached the highest levels in a century over the past three months. Today an ounce of gold is worth about $1,100. In these tight times, the bull market for gold has spawned a wave of selling as consumers turn unwanted gold necklaces, rings and other jewelry into cash.
The Gold Guys do most of their buying at their store at the Mall of America. They also do house calls and gold parties, where people with unwanted gold gather to sell it.
Laurie Maul of Cottage Grove recently hosted a gold party. She was looking to sell some of what she called her "old bling."
"I never wear any of it anyhow," Maul said. "There were remembrances. But what are you going to do with it? Get some money."
For hosting the party, Maul was reimbursed for providing food and drinks. And she'll get a check equal to ten percent of the value of whatever gold and other precious metals the Gold Guys buy at the party. About 20 people showed up at Maul's party.
Keith Larson of Red Wing was the only guy there. He eagerly took a seat at Maul's kitchen table, plopping down several bulging baggies, much of it picked up at garage sales.
"Cufflinks, tie tacks. Got some old pins," Larson said.
Larson also had a set of a dozen silver spoons, pocket watches, and even some teeth.
Zak Beasy was one of three Gold Guys employees working the party. He and his co-workers go over each piece to determine if an item is made of gold, silver or platinum and if it's of sufficient purity to be worth buying. They're not interested in plated items.
They generally want items that are least 40 percent gold, silver or platinum.
The Gold Guys said they'll pay up to 90 percent of the market price for precious metals. Those prices apply to 24-karat gold, though, pure gold. The lower the purity, the less they pay. A 10 karat piece, for instance, is about 42 percent gold.
Beasy and his crew use magnets, acids and other tools to identify and value precious metals. He said they have to be careful about what they're buying.
Occasionally, Beasy has to give some really bad news to would-be sellers.
"I had a woman come in. She had a $3,500 engagement ring that was platinum that really wasn't platinum," Beasy said. "I don't know which jewelry store she got it from. But needless to say, it's not always fun delivering the news."
But at this party, folks are getting good news and finding their unwanted jewelry is worth more than they expected.
It turns out that Keith Larson had silver and gold worth $517.
"Sounds good to me," Larson said.
Larson figured he was getting a good price and didn't need to find out what someone else might offer for his collection.
But it can be worth comparing what different gold buyers will pay.
Last November, Consumer Reports tested a mix of online buyers and jewelry and pawn shops. The magazine sold identical pieces of jewelry to the businesses. And got paid anywhere from 11 to 70 percent of the day's market price for gold.
Some folks counsel this is the time to hold onto gold.
Donn Norling is senior monetary specialist with Investment Rarities in Minneapolis, a company that has been selling precious metals for 35 years. Norling said the weakening dollar, the soaring federal deficit and prospect of inevitable inflation are forces that are driving up the price of gold. "Gold is in a primary bull market trend. It has been for a decade," Norling said.
Investors don't have to buy gold coins or bars to benefit from gold. They can buy funds that invest in gold. Back at Laurie Maul's the gold party, it's all about selling unwanted gold while the price is high.
Maul thought her "old bling" would pull in about $300.
"I got like $540 off of some rings from high school. And a few bracelets back from high school and a couple of my mom and dad's things," Maul said.
And she also gets her expected ten percent cut of gold sales at the party, as well as a five percent bonus because sales exceeded expectations. Those gratuities put another $420 in Maul's pocket.
In this market, both buyers and sellers of gold seem happy.
- All Things Considered, 02/24/2010, 3:49 p.m.