Transcripts

The New Gold Rush

JEFF YASTINE: Finally tonight, the sour economy and tightening credit have a lot of people in a bind for cash. Many are turning to some of the only unmortgaged assets they have left to make ends meet: their jewelry. To meet that need, companies have a way to extract gold and silver from the nation's jewelry boxes and sock drawers. Consider these folks modern day miners of gold and silver. Instead of picks and shovels, they use the tools of the digital era and the material they mine isn't rock, but thousands of packages a week that arrive in the mail, containing gold earrings, silver bracelets, silver platters, even gold tooth fillings. You may have seen the ads for the company. Jeff Aronson and his partner built Cash4Gold into a brand name by turning stay- at-home moms and others into sellers of gold and silver jewelry when they need the cash.

JEFF ARONSON, CEO, CASH4GOLD: She sees the Cash4Gold ad, come on. It hits a chord. She says you know what times are a little tough right now. She has a jewelry box. She has complete anonymity. Nobody knows. She doesn't have to feel bad about the transaction.

YASTINE: Customers interested in selling request a prepaid, insured and bar-coded mail pouch. That code identifies the jewelry as it makes its way through the system. Aronson says the key was figuring out how to securely track all that inventory.

ARONSON: What we do is we do over 15,000 packages a week. Each of them could be a quarter of an ounce each. So we've got millions of pieces of jewelry in the plant. At any given moment, we know exactly where every piece is, where every customer's material is at.

YASTINE: Now when all that gold jewelry is assayed and processed, it's then melted down into this: a 900 ounce bar of gold. It has a purity of about 12 karats, so with gold at $732 an ounce today, that one bar is worth roughly $329,000 and it takes about 6000 pieces of jewelry, melted down, to form that one bar of gold. If you're one of those people thinking about selling old jewelry, the New York-based Jewelers Vigilance Committee has a handful of suggestions: choose a reputable firm, make sure you have some way of tracking the jewelry item when it's mailed and realize the gold or silver content of the jewelry may only be a fraction of the item's weight. Other companies are now trying to cash in on Cash4Gold's business model, including one with the sound-alike name of Money4Gold. President Daniel Brauser sees the consumer market as largely untapped.

DANIEL BRAUSER, PRESIDENT, MONEY4GOLD HOLDINGS: Jewelry has a very long lifespan, so people have been accumulating old jewelry items or other items that contain precious metals over the years. And this has been building up pretty tremendous stocks in their sock drawers and jewelry boxes et cetera.

YASTINE: Gold scrap recyclers expect Americans to continue mining those sock drawers and jewelry boxes as the nation's economic slowdown unfortunately runs its course.