Parties provide golden opportunity to unload old jewelry

Move over, Tupperware. The suburban house party is turning to gold.

As gold hits record prices above $900 an ounce, hordes of Detroit residents, mostly women, are flocking to private house parties to sell their broken gold chains, mismatched earrings, class rings and other gold jewelry they no longer wear.

"It is found money," said house-party proprietor Gail Kenny of Grosse Pointe Shores, Mich. "It's a bad economy ... People are looking for a way to get cash."

Two months ago, Kenny, a veteran jewelry manufacturer's representative, launched Michael David, a company that buys gold from guests of private house parties. To date, Michael David has sponsored four parties and booked more.

Kenny's partygoers come from "every walk of life," including stockbrokers, corporate executives, salespeople and opticians. Other proprietors have joined in this seemingly trendy, low-profile business model and have held parties in Detroit suburbs.

The business concept came to Kenny while she was trying to unload a gold Tag Heuer watch she never wore on eBay.

As the price of gold soared, she decided to scrap the watch instead. Kenny invited friends to bring their gold to her house, where she weighed it on a troy-ounce scale and sent a package directly to a precious-metal refiner she knew in New York. To her amazement, the watch drew $3,000.

"I knew this was an opportunity," Kenny said.

Here's how it works: A private house-party proprietor like Kenny books a party with a hostess, who invites people to her home for the party.

At a party, the proprietor inspects the gold and weighs it. If the gold is 10, 14 or 18 karat, the guest gets cash on the spot.

The proprietor resells the gold to a jewelry store, precious-metal dealer or refinery. Kenny says she has averaged $2,000 per party, and her hostesses have earned up to $500 each.

Registered nurse Liz Cheek pocketed $550 from hosting a recent party at her home in Keego Harbor, Mich., and selling old chains and class rings. She said her guests each left with at least $240 from gold sales.

"If it has no sentimental value and you are not wearing it, this is the time to turn it in," she said.

The amount a seller gets depends on the quality of the gold: 24-karat gold is almost 100 percent pure and commands the highest price, though it is rarely marketed in the U.S. The next, 18-karat gold, is about 75 percent pure; 14-karat, 58.50 percent pure; and 10-karat, 41.7 percent pure.

For the past month, businesses have been paying between $9 and $10 a gram for 14-karat gold - the most common purity level in the United States, according to John Abbott of Abbott Corp., a rare-coin and precious-metal dealer in Birmingham, Mich.

Gold has more than tripled in price in the past seven years. It hasn't been this strong since 1980, when it peaked at $850 an ounce before descending for 20 years. Futures trading this month on the New York Mercantile Exchange indicate that prices for gold will continue to rise through December 2009.
Source: azcentral