Page last updated at 01:28 GMT, Wednesday, 4 March 2009

OC's rich rush to cash in on gold

By Rajesh Mirchandani
BBC News, Orange County, California


The scene at Stephanie West's gold party

In an above-average house in an upscale neighbourhood of a decidedly well-to-do area, the wine flows, the laughter cascades and the canapes are politely declined.

About 15 women are gathered in the spacious kitchen/dining room of this comfortable home in California's Orange County, all showing off their jewellery.

Incomes in "The OC" are 25% higher than average for the state and unemployment lower. But even here, the US recession is biting. House prices have fallen nearly 30% in a year and now about one home in every 250 is at risk of foreclosure, or repossession.

America's wealthy are hurting, so this is a get-together with a difference: a gold party.

Guests bring old unwanted jewellery and sell it. It is tupperware for tough times. Not so much a bring-and-buy as a bye-to-bling.

Erin Stevenson
Erin Stevenson says the parties are a fun way to sell

Gold parties happen in other states but, in California, Erin Stevenson's company has about 11 reps who organise up to three parties a week. Erin has never known it as busy.

At the home of hostess Stephanie West, who recently retired early from the airline industry, Erin and her team of buyers test guests' trinkets for quality and weight.

Stephanie herself has a bag full of gold jewellery she has had for years, presents from old boyfriends that she will never wear again. Many others clutch the same: once valued, now unwanted gifts.

Erin pays about 60% of the market price, and then sells the gold in bulk to a refinery for about 95% of the going rate.

So the refinery pays below market rates, Erin makes a profit and, at more than $900 (640) an ounce, the guests feel like they are getting money for nothing.

Here, at least, gold parties are not a way to make ends meet. They offer easy liquidity for the cash-strapped middle-classes.

Gold being weighed
Each customer's gold is weighed and tested for quality

Many say they will spend the money they realise on treats - a piece of art they could not otherwise justify or a meal for the family.

Amie Larson, who says she holds down four jobs, says she is selling gold that was a gift from her ex-husband in order to pay for her new husband's birthday party.

After the gold is weighed and sorted by carat, Erin calculates the total worth for each guest. The wine has helped ease the mood but it is when the cheques get written that the party really starts to swing. And the amounts are not small.

Hostess Stephanie Hunt made $477 and salon-worker Amie Larson $416, while another guest, Bebe Bach, came out tops with $541. Others walked off with about $100 or $200.

One told me: "It's $100 more than I came in with."

As America's recession bites harder, it seems even the country's wealthier residents are willing to make every penny count.

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