Selling Your Gold Jewelry on Your Own? Get the Do's and Dont's

March 8, 2010— -- The economy is down, unemployment is up and money is tight for many people.

Gold prices are at a 10-year high, so some people look to make extra cash by selling their unwanted gold jewelry.

Mellody Hobson, president of Ariel Investments and "Good Morning America's" personal finance contributor, visited the show to discuss the do's and don'ts of turning gold into cash.

The price of gold has risen more than 25 percent in the past 12 months, and, with so much uncertainty in the world's economy, gold is in high demand. Hobson said gold parties have become popular. People get their jewelry appraised at these parties, and are then paid cash on the spot.

The pieces are eventually sold to refiners. This is not a way to get rich, Hobson cautioned.

The average seller earns between $100 and $200 per party, according to one gold party company, she said.

The service can be beneficial if someone has jewelry that won't be worn again because of damage or some other reason.

People should not trade sentimental pieces or pieces that are valuable, she said. Buyers at gold parties are not interested in the artistic or decorative value of the item but only the gold it contains.

An expert at Weiss Research Inc. estimated that people should be able to get 70 percent of the value of their gold at a reputable gold-party service. Purchasers have to pay middlemen and other overhead costs, Hobson said.

She urged sellers to walk away from any offer that's significantly less than that.

She noted, however, that prices vary widely from appraiser to appraiser. Whether sellers dispose of their gold at a party, to a jeweler or through some other service, they should be sure to get multiple quotes, she said.