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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 it again."

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 is wrong."

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 public.

"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 22 karats.

"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.

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