3:17 AM
MINNEAPOLIS - For Disa Kullman and millions of gold buyers and sellers like her, the party is over.
In 2009, Kullman hosted a gold party where she and 15 of her friends sold their outdated and broken herringbone necklaces, bracelets and rings for more than $1,500 in cash. "I never did it again," she said.
Back then, when gold prices started rising after the collapse of stocks, credit and many currencies, parties sponsored by companies such as GoldSwap were common. Gold buyers who set up shop in malls and jewelry stores advertised "we buy gold" incessantly. For middle class consumers, selling became a source of "found money."
Today, as the price of gold has dropped from peaks that followed, the parties have evaporated, most gold-buying stores and kiosks have closed, and the ubiquitous TV commercials by the tan, smiling Gold Guys are history. How did gold lose its luster?
In late August 2011, gold hit an all-time high of more than $1,900 per ounce in after-hours trading, before falling to $1,600 in 2012, $1,200 in 2013, and drifting along at around $1,100 since 2014. As gold prices declined each year, so did consumer interest in selling gold for scrap.
"It was just crazy in the heyday - 2010 to 2012 was off the charts," said Joe Beasy, co-owner of seven Gold Guys stores in Minnesota and California. "We were spending $190,000 a month on nationwide advertising."
The Gold Guys closed three of five stores in California, as well as others in Cincinnati, Dallas, Hawaii and Las Vegas, which Beasy attributes to poor locations. "Our revenue is down 70 percent," he said. "But we're still profitable. If you trade gold in the aftermarket and pay attention to the peaks and valleys, you can make a profit on the back side."
Up to 80 percent of stores that specialized in gold buying nationally are gone, Beasy estimates, as well as many of the websites where people could mail in their gold pieces.
Business at Independent Precious Metals in suburban Minneapolis today is about one-fifth of what it was at the peak, says owner Doug Rooney. "The amount that the scrap market has fallen is staggering," Rooney said.
Besides the loss of interest due to lower gold prices, some say the drop-off is because many consumers don't have anything left to sell.
"Six years ago, I got rid of tons of old pieces that I wasn't wearing," said Bonnie Johnson. "The jewelry I still have I don't want to part with."
Gold pieces sold in the last eight years were often 20 to 40 years old, bought when gold cost less than $400 an ounce.
