Swiss strike gold with unwanted jewellery

Is this necklace safe from the smelter? Keystone

As the price of gold rises, many people in Switzerland are rushing to cash in, by selling old pieces of jewellery and other gold items they may have at home.

This content was published on October 13, 2010 - 08:11
Julia Slater,

It’s no problem to discover where to go: just flick through the small ads of the newspaper, or walk around the shopping area of any town, and you’ll soon find someone interested in buying what you have to sell.

But Monika Baumberger, general manager of precious metals recycler Edelmetall-Service in Switzerland says that not everyone will give you the same deal.

“The price of old gold is not fixed,” she told “You have a lot of itinerant dealers, and since it’s up to the buyer to decide what he will offer, you can find huge differences. That’s a bit of a problem, because the lay person can’t know what would be reasonable.”

“There are occasions when they really get fleeced.”

But even dealers and jewellers with fixed places of business will only pay the price of the metal content, she points out. “We always tell our customers that although they’ll get money for their pieces, it’s only a fraction of its value as jewellery.”

The established businesses all offer around the same kind of price, she said; but what is important is that it should be transparent and that clients should know what to expect.

The price depends on the number of carats and the weight; serious dealers are able to analyse the exact gold content if the client cannot tell from the hallmark.

Changing attitudes

Gold purchaser Christian Bonnet of the Gold & Cash chain based in western Switzerland, told the French-language newspaper La Liberté that mentalities had changed radically.

“At one time people used to hold on to their gold out of a sense of tradition. Now they aren’t bothered about having it smelted down,” he said.

Bonnet’s chain has gone from strength to strength: he started in 2008, and now has 13 outlets in Switzerland and two in France, and is planning further expansion.

Baumberger has several explanations as to why this is happening.

“Lots of people have old jewellery lying around in their drawers at home, and it never occurred to them that they could sell it. But since the media have started to talk about the fact there are outlets that will buy old gold, it’s becoming commoner.”

“It ranges from younger people, who perhaps have gold chains or rings they no longer want to wear, to older people who don’t wear their jewellery because they don’t like it any more, or they don’t have any occasion to wear it. Then there are lots of people who have inherited pieces they don’t wear.”

Another reason people quite often give when they bring pieces in is that they have had a burglary in the past, and decide to sell what’s left rather than risk losing it.

Of course it’s always possible that the pieces being offered for sale have themselves been stolen. Baumberger says her firm always checks the identity of clients, and of course is notified by police about robberies.

Where does it go?

Switzerland is one of the world’s leading smelters of precious metals, with four refineries, three of them in the Italian-speaking canton of Ticino, and the other in Neuchâtel. According to the Reuters news agency, about 40 per cent of the world’s gold ore is processed in the country.

But the director of one of the refineries – who asked to remain anonymous – told La Liberté that scrap jewellery now accounts for about 20 per cent of their business.

And it is not only the Swiss who are selling: pieces are coming in from all over the world, with Vietnam a major seller. La Liberté names a range of other countries as sources of gold scrap: France, Italy, Britain, the United States, Japan, Hong Kong, Singapore and the United Arab Emirates. It says that between January and August this year, Switzerland imported 85 tonnes, of which 45 came from Vietnam alone.


Another refinery representative – who also asked to remain anonymous when interviewed by – explained that one attraction of Switzerland was that all its refineries produce what are known as “good delivery bars”: they meet the very specific standards laid down by the London Bullion Market Association, and are used by the major international markets, governments and banks.

And then, Switzerland is known for its reliability. “The client sends us his material: he must be sure that it’s always his, not ours. We just work it for him,” she said.

Whether new gold or old gold, by the time it is processed it is all the same.

“We receive material from mines, or we receive material like old scrap, and this is analysed and refined and then transformed into whatever we need,” she explained.

Once refined, the gold is sold to clients like banks, who often sell it on to private individuals as investments. Although people buy more when the price is low, gold hasn’t lost its shine.

“Since last year people don’t trust the banks so much, and don’t like to buy shares and things like that. Gold is always something more secure.”

The lure of gold

Gold has occupied a special place in human affections for at least 7,000 years. Its importance as a medium for economic transactions can be traced back to dynastic Egypt.

Almost every major civilisation from ancient China to classical Greece, from imperial Rome to the Incas and Aztecs of pre-Colombian America, has prized gold above all other metals. Gold's ability to transcend all differences of race, religion and history sets it apart from other metals.

Gold has a low tendency to enter into chemical reactions with other substances. This makes it highly resistant to corrosion and virtually indestructible.

Thanks to its chemical inertness, gold jewellery is much less likely to cause allergic skin reaction than jewellery made of other metals.

(source Credit Suisse)

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The price of gold currently – in October 2010 - stands at around $1,350 (SFr1,295) per ounce.

Gold is unusual in that it is both a commodity and a monetary asset.

Since it is virtually indestructible, all the gold that has ever been mined still exists above ground.

It is estimated that more than two thirds of this has been mined since 1950.

Gold reserves are held by central banks, government bodies and supranational organisations like the International Monetary Fund and the European Central Bank.

The demand for gold is met by both mine production and the recycling of existing stocks.

Annual demand for gold comes from three main categories: the jewellery market, the industrial sector (mainly electronics, but also dentistry and other applications), and investment.

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