By David W. Hill
dhill@modbee.com
and M.S. Enkoji
The Sacramento Bee
It could be California’s second Gold Rush.
The skyrocketing price of gold has people mining their jewelry boxes for every bit of the precious metal to sell for cash.
Prices have gone from $416 an ounce on New Year’s Eve five years ago to a little more than $1,000 in 2008. The price closed at $807.30 an ounce Friday.
People are cashing in at pawnshops and jewelry stores. Some are responding to TV commercials offering cash for gold mailed in pre-addressed envelopes.
What’s a gold digger to do? Be careful.
That’s the warning from reputable gold dealers and consumer advocates.
“People who send away jewelry without checking on the company are really running a huge risk,” said Barry Goggin, president of the Better Business Bureau in Sacramento.
David Adelman, president of the National Pawnbrokers Association, admits he’s a little biased but said, “At least when you walk into a pawnshop, you face the person you’re dealing with.”
Many pawnbrokers — who are licensed and regulated by the state of California — hire gemologists, who can determine if jewelry is more valuable sold as is or melted down, according to Jan Schneider, legislative chairman with the Collateral Loan and Secondhand Dealers Association of California.
Ron Yates, co-owner of Yates & Co. Jewelers at 3501 McHenry Ave. in Modesto, said people with gold to sell should make sure they are dealing with an established business that has a certified gemologist to evaluate each piece.
Yates, who began buying gold more than 20 years ago when he was in the coin business, said consumers shouldn’t be pressured to accept the price that’s offered. If there is any doubt the offer is fair, he suggests getting multiple estimates.
Michael Gusky, who owns GoldFellow, a gold-buying business based in suburban Fort Lauderdale, Fla., said a large percentage of his business comes from customers who send him their gold via FedEx.
Gusky posts his prices online, so people have an idea of the going rates and what items are worth.
“If you don’t sell to us, use us anyway. I’m here to make a profit, but if we can help people achieve a higher price, that’s fine.”
Yates, who’s seen an uptick in people wanting to sell him gold jewelry as the economy soured, said local gold dealers usually pay more for pieces than national mail-in firms because they don’t have the overhead and advertising costs.
For people thinking of mailing their gold jewelry to a dealer, Yates urged them to have it weighed and appraised before shipping it off.
If someone brings gold jewelry to his business, Yates identifies any gemstones in the piece and determines the gold content, which varies widely. For example, he said, 14-karat gold is 58 percent pure and 18-karat gold is 75 percent pure.
Then he’ll give his estimate.
Yates said he’s paid thousands of dollars to some people who brought in old, unused or broken gold jewelry, from rings and chains to teeth and even faux fingernails.
Some people trade in items for some of his merchandise, but most just want money. “Times are tough,” he said. “People have lost their jobs, and this is a good way to get a few extra bucks.”
Becky Gann of Oakdale said one of Yates’ advertisements prompted her to bring in some old, unused gold jewelry. “I was just cleaning out closets and drawers at the beginning of the year,” she said of the few small pieces she found.
Gann, who used the $100 she got from Yates to cover some unexpected expenses, said the process was “totally painless.” Having done business with Yates & Co. before, Gann was confident she got a fair price: “They’re very professional.”
Although she didn’t hit the Mother Lode on Thursday, Gann said when she got home, “I went through some other stuff.”
For all those gold hunters he’s made happy, Yates also has disappointed a few who didn’t realize the pieces they wanted to sell were worthless costume jewelry.
Occasionally, though, he discovers something special, like a watch he can resell to collectors because it’s an unusual antique — that just happens to be gold.
Bee Business Editor David W. Hill can be reached at dhill@modbee.com or 578-2336.
Source: www.modbee.com
