Consumers Barter Their Bling as Gold Prices Soar; Bullion Figure Touches $1,000 per Ounce

Daily Post (Liverpool, England), September 23, 2009 | Go to article overview

Consumers Barter Their Bling as Gold Prices Soar; Bullion Figure Touches $1,000 per Ounce


Byline: KELLY MacNAMARA

GOLD rush fever is being felt in living rooms and shopping centres across the country, as consumers look to beat the recession blues by cashing in on old jewellery, watches and even teeth.

But, as services vary in style - postal, shopping centre and Tupperware-style parties - so, too, does the amount that consumers can expect to receive, with warnings that some firms are paying just 20% of market value.

The number of companies offering people cash for their unwanted gold has soared as the price of bullion nudges $1,000 (pounds 600) an ounce.

Gold is traditionally seen a "safe haven" investment for investors, and tends to benefit when markets and economies hit troubled times and confidence erodes.

And, as global investors are shoring up their finances by buying into gold, recession-hit individuals are off-loading their unwanted jewellery for cash.

A rash of television advertising, with promises of handfuls of cash, has helped to awaken the UK population to the money-making potential on their dressing tables.

Postal firms have been particularly vocal in encouraging the UK to embrace a popular trend in the US.

Customers send their items to the companies in special packs, and these items are then assessed and a valuation is made.

The amount of money that someone can expect to get from their gold will depend on the number of carats it has. Most jewellery is nine-carat, which is only 37.5% gold, with the rest made up of other metals like copper, zinc and silver.

At market level, gold is measured and sold in troy ounces. One troy ounce equals 31.1035 grams.

Concerns have been raised about some of the new goldmelters on the block that do not reveal in advance what standard rates are.

One postal company that does publish its rates is Gold-Traders. It will pay from pounds 6.87 for a gram of nine-carat gold, up to pounds 18.13 for the same quantity of 24-carat at current prices.

The firm quoted pounds 563.90 for an ounce of 24-carat gold, so around 91% of the current world price.

Chief executive Phil Williams said: "The reason (competitors) don't publish their prices is because they pay somewhere in the region of 20% of market value."

His firm has seen an upturn in business in the last 18 months as consumers try and find new ways of making money.

He said the big advertising campaigns of some of the newcomers had also helped raise the profile of the industry.

Of the other firms in the market, Cash4Gold and Postal Gold do not list the prices they pay for gold on their websites, and did not respond to requests for details.

Cash4Gold, which uses former rap star MC Hammer in its US adverts, promises to convert unwanted jewellery into "cold, hard cash" - although the firm concedes on its website that consumers might be able to get more money elsewhere. …

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Consumers Barter Their Bling as Gold Prices Soar; Bullion Figure Touches $1,000 per Ounce
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