The Next Gold Rush: Your Living Room

CBS Evening News: Rising Price Of Precious Metal Spurs Cash-For-Gold Parties

(CBS)  It’s Friday night in Long Beach, Calif., and these women not only have drinks in their hands, they have full pockets. CBS News correspondent Ben Tracy reports its fitting, at what is dubbed a “gold party.”

“There’s nothing to buy,” said one partygoer. “It’s just cash for gold.”

So they come with their jewelry, most of it is as out-of-date as the person who gave it to them.

“This is a ring with a dolphin on it, I do believe,” said one woman.

“One is from an old boyfriend,” said another.

First, it gets inspected, then weighed. Often, it’s worth a lot more than you would think.

“Beats working an extra shift,” one partygoer said.

All of that former finery ends up at a smelter, melted down into gold bricks often worth $10,000 a piece. Many are now hoarding them as a hedge against a sinking stock market. Americans bought 77 tons of gold bars and coins last year, a 42 percent increase from 2007. With gold prices up to around $900 an ounce, and the economy down, many are passing on the little blue box. It is even turning some jewelry sellers into gold buyers.

Joe Shafir now drives an aptly colored car - gold. He hasn’t sold a single item at his jewelry shop in five months. But he’s making tons of money buying ounces of gold.

"It makes more sense to buy and recycle old jewelry than to be in the business of selling new jewelry to the customers," Shafir said.

Meanwhile, these gold parties are providing a much needed source of cash.

“It’s not just fun money,” said Erin Stevenson. “It’s paying the bills or paying the mortgage.”

Marie Dicola-Meyer’s husband broke his neck and they have $3,000 in medical bills. She brought her gold thinking that she’d maybe get $100. Try 10 times that - $1,190.

“Thanks Josh - that’s my ex-boyfriend,” said Dicola-Meyer.

An old relationship - worth its weight in gold.

[monketeeth]

I attended a gold party last weekt, what a ripoff. I walked out without selling anything. I felt like I was being pressured by the guy who was testing the gold with my "freinds" egging him on. What a horrible experience. I did some research on the web and found this company. I think it was the Silverandgoldexchange.com. Anyway, They were great. No high pressure sales tactics, no embarassment in front of my freinds. They sent a Fedex guy to my door and picked up my gold insured for free. They called me back in a couple of days and gave me a price that I was really happy with. The best part was that they would have sent it back to me at no cost if I wasn't hapy with the quote. Anyway, I was really happy with it and they had the money in my Paypal account that day. All in all a really cool experience and I'm a little richer today.

[cbswatcher]

There has already been an uproar over these gold parties, and these mail order gold buying firms, and you missed it?? come on now. People are getting ripped off and all you did ws promote the villains.

[amberpet]

These companies pay agents big bucks to get them spots on the news. It then appears as an "interesting story". You will be surprised how little they pay for your gold - a fraction of what is it is worth. If they do get a valuable piece, they still pay you peanuts, and turn around and sell it on ebay and make hundreds off of it.

CBS should be more responsible about what it airs. They are making it sound like a gift to consumers, when in fact they are being cheated.

[Jennifer636]

Unfortunately, these gold parties take advantage of peoples lack of knowledge about what their gold is worth. Paying the host or hostess a commission to lure their friends in and then paying pennies on the dollar is not the kind of party I would like to attend. I did a lot of research when I wanted to sell some gold and silver and found very few companies that would even tell me what they pay per gram. Finally I found the SIlver and Gold Exchange at http://SilverAndGoldExchange.com They post what they pay right on their website and they paid me well and offered very good service, so I thought they deserved a mention here.

[JessicaKendrick]

As a Graduate Gemologist in the jewelry industry for 25 years, I would be cautious about gold parties. I have heard about good ones and more often than not the bad ones. Bounced checks, not enough returns for the amount of gold brought and problematic security issues are just a few most notable problems.

There are great reasons to have gold parties. It can be a good and a fun business transaction. It is found money that everyone needs right now in this economy. Quite often, when business is conducted correctly, an individual can get more cash in hand than when you go to other dealers or jewelers. More often the greed factor is a strong motivator to make more per ounce, gram or pennyweight than what is ethical. Before you attend a gold party, make sure of the following: you trust the individual throwing it, that it is a safe and secure place for you to go, cash is the order of the day and the buyer is very knowledgeable about the subject matter.

It is not unusual to have a piece of gold that crosses my hands that is worth MORE than just the gold value. I am a Graduate Gemologist with particular training in the estate, antique, signature and period pieces of jewelry. In the past, it has been my place to give information about the item(s) to the perspective seller and specifically ask if the individual was sure they wanted to sell it. I guarantee that the ignorant gold buyer will send the item to their home office. The home office will inspect each piece and is expecting that their buyers will be making a lucky buy to garner them more money. This is not right and is one of the HUGE pitfalls of a gold party. There are good buyers and bad buyers out there. Sellers beware! Do your due diligence when selling your hidden treasures from your jewelry box. Jessica Kendrick, G.G.

[tfoth2]

If CBS really cared about its viewers you would have informed them of the fact that there are many vultures out there who profit by offering much less cash for the peoples gold (the only real asset of most of them own) than they will turn around and get for it. How about a single word of caution? How about letting your viewers know how to estimate the melt value of their gold, so they won't be terribly ripped off! Allowing Gold for Cash Ads as currently on the air are invitations to be ripped off!

[goldpartyus]

Gold parties are a blast. Selling your gold at a home with friends and family is much more social than just selling it in jewelry store or pawn shop. However there is one caution, not all home parties pay the same, it?s always best to get some competitive offers from several people prior to selling your gold to assure you the best price.
Patrick Coughlin
www.goldpartyus.com