It's a new gold rush

Since the recession began, cash-hungry consumers have been selling broken herringbone necklaces, high-school class rings and single earrings. That was when gold was selling for $800 to $1,200 an ounce. Now that gold is near $1,600 and has traded as highly as $1,800, jewelers, pawn brokers and precious metals assayers are seeing repeat customers who are bringing higher-quality pieces.

Regardless of whether people are using the "found" money to pay bills or fund a trip to Aruba, cash is king in this economy, said Brad Rixmann, owner of Pawn America.

"More people are selling things they acquired in the last 10 to 15 years than ever before," he said. "It's baggage turned into cash."

With a sputtering economy, rising food prices and stagnant wages, selling excess jewelry and silver collectibles can be a painless source of income. That's why so many first-timers have become repeat customers, said Joe Beasy, co-owner of the Gold Guys in Bloomington and Maple Grove.

"After people see what kind of prices they get on the old, broken or ugly pieces, they start looking for their jewelry that's perfectly good but out of style," he said.

Gold trinkets net the most, but silver glitters, as well. When silver prices rose to $40 an ounce this year, customers were selling sterling silver trays for as much as $2,500 and eight-place settings of sterling silver forks, knives and spoons for $4,000. In fact, some of those customers made so much money selling their silver that they're trolling garage sales, looking for tarnished, dented sterling, Beasy said.

Silver's glimmer dimmed recently when it dropped below $28 an ounce. Despite the recent volatility, precious metals still hover at historically high levels.

Gold and silver typically are melted down. But as people dig deeper into jewelry boxes and junk drawers for quick cash, buyers are increasingly being offered pieces embedded with small diamonds or semiprecious gemstones.

Most jewelers have rejected those pieces because removing the stones takes time and finding buyers for modest gems can be difficult. But some jewelers and gold buyers are finding ways to keep that business from walking out the door. Beasy is putting gemologists on staff at Gold Guys to handle the increase in diamonds and gems being brought in.

Bergstrom Jewelers, like many other local jewelers, has gotten requests from customers to buy jewelry, said owner Bob Zagaros. Until recently, he simply said no.

"We're not in the used-jewelry business," he said.

But earlier this month, he hired Circa Jewels from New York to host a two-day buying event at Bergstrom's St. Louis Park location. More than 200 people made appointments and sold about $300,000 in diamonds, watches, pendants and brooches, according to Craig Miller, managing director at Circa. The company, which holds more than 25 buying events nationwide each year, is buying more fine jewelry every year, he said.

Christina McMillan of Diamonds Direct in Minneapolis said she gets two to three calls a day from people wanting to sell their diamonds. "A lot of people are selling them just to pay bills," she said.

Jimmy Pesis, owner of Continental Diamond in St. Louis Park, agreed. He said he's heard stories of people selling jewelry to make their mortgage or car payments.

"People in real estate seem to be hit the worst," he said. "They're selling Rolexes and diamonds."

But McMillan, Pesis and other buyers say those with hard-luck stories aren't the only ones selling. Some people with overflowing jewelry boxes are simply taking advantage of higher prices.

"They're bringing in bags full of nice stuff that they're tired of," Rixmann said.