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WORLD> America
Economic slowdown fuels gold parties
(Agencies)
Updated: 2009-03-19 10:38

GRANBY, Conn. -- The women gathered in the kitchen, enjoying brie and chocolate tortes as they told stories about their high school rings and pieces of jewelry given to them by ex-husbands and boyfriends. But they weren't just reminiscing for old times' sake.

The guests at Cheryle Podgorski's "gold party" were there to trade in their old jewelry for cash.

Guests at a gold party, from the left, Jessica Reynolds, Lindsay Bugbee, her mother Jane Bugbee, and Jennifer Phillips, all of Granby, Conn., watch as gold tester Maggie Percival, hands only at right, evaluates the value of pieces of gold jewelry in Grandby March 12, 2009. Gold parties tap into a host's social connections to drive up attendance, while the presence of friends helps reassure partygoers that selling gold isn't taboo. [Agencies] 

Gold parties, the recession answer to Tupperware parties, have become increasingly popular around the country as people cast about for ways to raise money. A professional gold buyer tests and appraises the guests' jewelry and then pays them on the spot.

Guests say getting together with friends in somebody's living room makes it a fun, social occasion, and feels more respectable than hocking their rings, necklaces and brooches at seedy pawn shops or selling them back to jewelry stores.

"It's terrific because it's a little bit intimidating to think about walking into a jewelry store, even though they may be heavily advertising it, and, you know, to someone that you don't know and turning over your valuables to them," said Pat Walsh, a 56-year-old retired store manager from Simsbury, Conn.

Walsh went home with $286 after selling a pinky ring she received as a wedding favor 35 years ago, circle-linked bracelets, broken necklaces and a few large, mismatched or outdated earrings.

Gold prices are close to their highest levels on record, hovering around $900 per ounce, up from $400 five years ago. Analysts say investors looking for a safe haven for their money while the stock market is in a meltdown could keep gold prices high for some time.

That -- together with aggressive advertising by online scrap gold buyers, jewelry stores and gold party organizers -- has led many people to clean out their jewelry boxes and dresser drawers.

Several companies are mining the phenomenon, which first began to thrive in Michigan a couple of years ago amid the struggles of the auto industry. My Gold Party LLC now has at least 35 representatives running parties in 21 states and is looking for more, said January Thomas, co-owner of the Grosse Pointe Woods, Mich.-based company.

"It's definitely a growing trend. I mean, the economy is not getting any better," Thomas said.

The gold buyer at Podgorski's party, Maggie Percival, said she started organizing parties this year as a representative of My Gold Party to raise money to send her son to college. She soon learned that gold parties can carry an element of risk for organizers.

"I've actually given money to people for stuff that isn't gold because I didn't test it properly. That was when I was a newbie. I've gotten much better at it," Percival said. "I had to pay the price for that one."

In front of the guests, Percival uses a jeweler's magnifying loupe to assess the gold, a digital meter to test whether it is real, and an electronic scale to weigh it.

At Podgorski's party, women laughed as they narrated stories behind their jewelry, which included gifts from ex-husbands and boyfriends who no longer inspired fond memories, 1960s cocktail rings that a man gave to his wife before they divorced, and a souvenir from a high school trip to Russia.

"Somebody at a party last week had a pre-engagement ring from her boyfriend before her husband, and her 14-year-old daughter wanted the ring, and she said, 'If your father ever saw you with that ring on you, he'd kill me,' so she sold it," Percival said.

The gold-buying services typically are not interested in the jewelry itself. Instead, they sell the items to gold refiners to be melted down.

The gold party host and gold buyer generally get a 10 percent cut. Podgorski made $300 at her party, which she said she donated to a charity she runs that provides free prom dresses to high school girls who cannot afford one.

"It's fun, it's something different. It's not a Tupperware party, it's not Pampered Chef," said Jennifer Phillips, a 39-year-old high school suspension supervisor and mother of six, who made $321 on her gold sales.

Alona Bloom, a 34-year-old mother of two and a teacher's assistant in Pittsburgh, recently sold old jewelry at a friend's gold party. Bloom thought she would leave with $100 but walked out with $700.

Now, she is working to organize her own party to earn the 10 percent commission. She would like at least 10 sellers but has found just eight so far.

"A lot of people have already sold their gold," Bloom said.

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