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Thursday
Aug112011

Gold Rush Is Also a Boon for the Refinery Biz

Norm Betts/Bloomberg via Getty Images(NEW YORK) -- Investors aren't the only ones rushing to profit from the booming value of gold. Refiners, who buy scrap gold from dealers and private owners, say they are also seeing an upsurge in activity.

"It is great for business," says Terry Hanlon, director of the metals division of Dillon Gage, which operates a gold refinery in Texas. He says revenue from the gold refinery business has increased 200 percent in the last year, while silver is up 300 percent.

With gold worth $1,775 an ounce, "it comes out of the woodwork," he said, with individuals bringing their items to dealers, who in turn sell it to refineries where it is melted down to its purest form.

More people are selling gold because they have become aware of its high value in the current economy -- and because they have to. "People of course need money," says Candy Frankel of Midwest Refineries in Michigan. "Most people are very pleased with their settlement."

Individuals who want to cash in on their gold jewelry or coins usually sell them to dealers, who in turn bring scrap gold to a refinery, where it's melted down. A sample is sent for a process called assay, where the purity of the gold is determined. The higher the karat, the greater the value: 18 karat gold is 75 percent pure gold, for example, while 12 karat is 50 percent gold.

Dealers are also bringing in silver, now selling for $39 an ounce, says Hanlon—flatware, serving trays, tea sets. "Many people who have silver look at it and say, 'We never use this, we tuck it away,'" he says. They don't always realize that not all their flatware is sterling silver—knives, he says, have stainless steel blades and only the outside of the handles are sterling.

He says business is booming, and Dillon Gage moved last month to a much larger space. Frankel also described the refinery business as "extremely" good right now.

Steven Polinksy, owner of Dvir and Stoler in New York City's diamond district, has a gloomier outlook. "At this point the scrap business has slowed down," he says, because people who want to sell their jewelry have already done so, while wealthier people will hold onto their gold despite the soaring price.

Polinsky says the gold boom has dealt a knockout blow to the jewelry business because pieces cost too much. Even couples who are getting married have cut back, he says."They're buying thinner wedding rings, 12 karat instead of 18 karat."

He warns that people who are selling gold to be careful. "A lot of these people that are selling jewelry are being taken advantage of," with some buyers offering only 70 percent of value, he said.

But Polinsky thinks the gold rush is far from over. "Gold makes the world go round," he said. "Gold will always have a value. You may one day have to pay for your groceries with gold."

"I absolutely don't think it's a bubble," says Hanlon.

Copyright 2011 ABC News Radio

Thursday
Jul142011

3 Things You Should Never Carry in Your Wallet

Brand X Pictures/Thinkstock(NEW YORK) -- More than eight million Americans were the victims of identity theft last year. What the personal information thieves are looking for can often be found right in your wallet -- which is why it's so important to know what's in there. Mellody Hobson, president of Ariel Investments, talks about what you should and should not have in your wallet.

1. Your wallet can contain your life, which is not always a good thing. Let's start with what we should keep in our wallets. Credit cards? Yes, you should carry a credit card. But just one credit card. The good news is that most people now have two credit cards, which is down from three cards just a year ago. The more cards you carry, the more likely you are to over-extend yourself. Also remember even if you have a credit card in your wallet but never use it, it adds to your available credit, which affects your credit rating.

2. So you should carry some cash? It is important to carry some cash. Studies show that when people use plastic versus cash they spend 12-18 percent more. Also, you don't want to use your credit card or debit card to buy things like gum and other small purchases. If you're just paying your minimum balance, you could end up paying interest on those small purchases.

3. Should we save all our receipts, and is our wallet the right place to keep them? Receipts not only clutter your wallet, but they could contain information about you that identity thieves could use. So you should take any receipts out of your wallet every night. Either reconcile them at the end of the week online against your bank account or credit card website, or save them until the end of the month and reconcile them against your monthly statements. But don't store them in your wallet.

4. What else should you not have in your wallet? The number one thing you should not carry in your wallet is your social security card. If it gets into the wrong hands, it can be used for everything from buying a car to opening a credit card. You should also never carry your passport in your wallet. Even if you are traveling in a foreign country, leave your passport in your hotel and just carry a photocopy of the picture page. And of course do not keep a list of your PINs and passwords in your wallet. That would be a gold mine to a thief. Keep those passwords at home.

5. What else should we take out of our wallets? Don't keep anything in your wallet that has expired. This includes old credit cards or membership cards. Just because they've expired doesn't mean thieves will not try to use them. Also remember most of them have at least your name on it, and probably your address and other personal information. The more information you can keep out of the hands of others, the better. Many people carry old hotel key cards in their wallet. Although almost all U.S. hotels do not put personally identifiable information on their key cards, the cards can often be used to make purchases at the hotel spa or gift shop. My best advice is destroy them after you have checked out, you don't need to return them to the hotel.

Copyright 2011 ABC News Radio







ABC News Radio