‘Gold parties’ attract sellers eager to cash in.

Miranda Scotland, Edmonton Journal
Published: Saturday, August 13 2011

edmontonjournal-old-rings-take-on-new-shineWomen crowd around a kitchen table, each hoping their handful of old jewelry will fetch them a few $20 bills.

When it’s Shirley Mueller’s turn, she pulls out a pair of earrings, a few rings and a watch.

“Don’t laugh at these earrings; I don’t know if they’re phoney or not,” says Mueller, passing her loot to Noella Kostick, an agent with Gold Party Canada.

Kostick tests the jewelry and drops all but the watch, which isn’t real gold, into a Ziploc bowl labelled 14k. She weighs the contents as Mueller guesses how much her jewelry is worth.

“If I’m lucky, $60,” she says.

Kostick tells her she’s made $190.

“Maybe you want my wedding ring, too,” the 53-year-old Mueller says with a laugh.

Soaring gold prices are prompting many people to seek ways to turn old gold, long past its sentimental bestbefore date, into new cash. They’re doing it at “gold parties” like the one Mueller and Kostick were at this week, but also in jewelry stores and pawnshops.

On Monday, the price of gold broke $1,700 US an ounce for the first time. It broke the $1,800 barrier Wednesday, then settled down a bit, closing Friday at $1,742.60.

The recent price surge has been a boon to Kostick’s business. She used to average two or three gold parties a week. Now she’s doing five or six. Gold Party Canada sells the jewelry it buys to a broker who refines and recycles the gold. The party hostess gets a 10-per-cent commission.

Kostick once paid out $30,000 for gold in one night, but at a typical party she buys around $5,000 worth of jewelry – much of it rings, necklaces, bracelets and other items given to women as gifts by old flames or former husbands.

“There are certain things you see over and over again,” Kostick says. “It’s stuff that was hot at the time, but not so much anymore.”

At Beck Gold and Diamond Brokers on the city’s north side, Tammy Miller, 21, pulls piece after piece of jewelry from her purse. Company president Clinton Beck takes her bracelet, rings and necklaces and looks at them under a lit magnifying glass, then uses a small electronic machine to test the amount of pure gold in each item.

Miller says she got most of the jewelry from old boyfriends, and it’s time to get rid of it.

“It really doesn’t have any meaning to me,” she says. “I didn’t really want it; I don’t wear jewelry anymore.”

Her loot fetches her an unexpected $328.

City pawnshops are also seeing more customers looking to sell gold. But Joe Treger, the owner of Pawns on 99, says he has seen some customers head to other types of businesses that pay more for gold than pawnbrokers do.

Meanwhile, jewellers have had to mark up their stock because of the hike in gold prices.

Claudio Guerrero, owner of Edmonton’s Tara Jewellers, says he thought the higher price tags would drive people away, but that hasn’t been the case.

“It hasn’t made any difference,” Guerrero says.

“It’s been crazy today. I tell you it’s been nuts, this place. I can’t believe it.”

Customers are buying, and some are coming in to get their old jewelry remade. “That’s something we see a lot right now,” Guerrero says.

John Bruni-Bossio, owner of Bruni-Bossio Goldsmith Ltd., hasn’t had the same luck. He says he has witnessed a definite decrease in the number of customers buying gold jewelry.

“It’s harder to sell,” he says. “A lot of people are in shock of the price . you can see the look on their face.” The Better Business Bureau is urging caution when selling jewelry. It advises consulting an appraiser first, not letting different karats of gold get weighed together, and determining if they’re able to save any of the gemstones in the piece. Also, the bureau says it’s important to remember that most jewelry is less than 100-percent gold.

“You’re only going to be making at most 50 per cent of that $1,700 quote,” says Ron Mycholuk, community consultant for BBB.

“So when you get that cheque in the mail, it can be rather disappointing.”

Likewise, anyone thinking of buying gold as an investment should use caution, says Marshall McAlister, who is on the board of the Edmonton Society of Financial Analysts,

“Gold isn’t necessarily the safe storehouse that it could be,” McAlister says. “There’s been a long period where gold did nothing for value. What remains a challenge is, does today’s information tell us anything about tomorrow’s prices? I don’t think it does.”

mscotland@edmontonjournal.com

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