Old gold gets new life, but
sellers might be disappointed
By Denise Flaim
Rising price makes cashing in jewelry
tempting, but it pays to do some research first.
It sounded too good to be true.
Bob Hoffmann, 56, of Gillette, N.J., had some gold
jewelry he hadn't worn in years a chain bracelet, a
ring, a money clip. When he heard a radio commercial
for a company that bought old gold, sight unseen, he
visited its Web site and sent his unwanted valuables
on their way.
Hoffmann expected to get well over $100 for jewelry
that had cost him four times that.
The amount of the check that the company promptly
mailed him? A trifling $58.
"It's nothing like what people say," concludes
Hoffmann. "And at the end of the day, I wouldn't do
Coveted by cultures as ancient as the Aztecs,
enshrined in myth, gold has a time-misted history as
the most precious of metals. Atomic number 79 on the
periodic table has served as the standard for many
currencies hence the term "gold standard." And it
is the ultimate recycled commodity: That dated rope
chain from your "Saturday Night Fever" days might
have had another life as a tiny scissor on a
Victorian chatelaine or an ancient Greek coin.
Hoffmann's experience to the contrary, today, more
than ever, it pays to cash in old gold. Last month,
the value of gold reached an all-time high of more
than $900 an ounce, breaking the record of $875 set
in 1980. (Then, as now, oil prices were skyrocketing,
the dollar was in the toilet and "stagflation"
inflation paired with a stagnant economy drove
investors to seek refuge in the conservative metal.)
"When the price of gold becomes newsworthy, we see
quite a jump in people selling old gold, and we're
seeing a large increase in business now," says Joshua
Garfield, marketing director at Philadelphia-based
Garfield Refining, which is in the business of
refining scrap gold. "And when people want to sell,
people come out of the woodwork to buy."
But how happy you will be with the cash you get
depends on the purity of your gold, how much of it
you are selling and how much research you do.
When it comes to selling gold, there are two options:
Sell to a jeweler or other go-between, or directly to
a refining company.
Cecilia Gardner, president of the Manhattan-based
Jewelers Vigilance Committee, notes that all
municipalities have laws requiring those who buy
secondhand gold to obtain identification of the
seller and hold the gold for a specified period. "If
a jeweler is not doing that," she warns, "something
Comparison-shopping pays off, says Eileen Stewart of
Roosevelt, N.Y., who visited several places,
including an appraisal fair, to get the best price
for some old jewelry and coins.
A less popular option is sending the gold directly to
a refining company, not all of which deal with the
"The bulk of our business is from professions that
use a lot of gold," such as dentists and dental labs,
Garfield says. "But we have a few private customers
as well," including miners who have panned for placer
gold, which looks like sand but can be between 18 and
"Sometimes, customers will request to be paid in
bullion," a tradable commodity for which they pay a
premium, Garfield says. Still others ask for the cash
value of their gold be used to purchase casting
material, or small beads of gold alloy of a known
karat that can be worked by a jeweler.
Sellers can also have gold refashioned into new
pieces, though it's not the easiest route.
"Very few people have the facilities to melt gold at
2,200 degrees Fahrenheit," says Joe Parrella, vice
president of Eastern Numismatics in Garden City, N.J.
"And it's more costly," because the resulting jewelry
will be custom work.