The global financial markets have currently been in turmoil for the past six months largely due to the effects of the increase of oil prices but also the disastrous sub-prime mortgage meltdown that was heavily felt in the United States. We’re all aware if the United States financial markets catch a cold the rest of the world will start blowing their noses too. I, like every budding entrepreneur with limited capital know that with every crisis there opens a new opportunity. From disasters ashes success can often follow. Capturing a market and identifying an opportunity can be elusive and evasive but consider a growing market that could be the second oldest profession in the world, gold trading. The image of gold invokes mental imagines of greed, decadence and wealth beyond the average punter's dreams, but not so. With a minor capital outlay you can become a gold trader.

With the dark cloud of recession and financial uncertainty hanging in the air and as investors look for a stable commodity it is natural that gold is hugely popular. The markets prediction of gold rising was inevitable but when gold peeked at $1030.80 on the 17th March 2008 (1). Looking back and considering that gold price as an example back in 2000 was only around $275 an ounce a shock and a shudder has reverberated around the world financial markets. Recent history tells us, it appears rising oil prices, weakening economies and financial instability has a direct effect by raising gold prices. With no immediate foreseeable decrease in oil prices and market stability it appears gold will remain at high levels.

It is hard to place a value on gold, as a youngster I remember being given the odd trinket made of gold. I am sure my pensioner Grandmother that gave me my first gold necklace was endearing me to endow affection upon her for the wonderful gift she had given me. Did it hold any true value? Well no because I loved my Grandmother anyway. It was soon after that she pasted away and the value of that necklace became apparent to me. As the years passed I still remember my Grandmother but I am sure she would be proud that I lost that necklace on a New Years Eve night, daring a girl to kiss me. Maybe this is what my Grandmother wanted and this is the true power of gold.

The rising gold price is creating exciting new and emerging small businesses. If you have a little time to spend with friends, to socialise and become an entrepreneur, you can become a gold trader. Instead of people selling there unwanted jewellery to some faceless, demeaning pawnshop you can step in and purchase unwanted gold trinkets and offer the sellers a good return. You can purchase a gold testing machine and a scale that will verify the karat’s of the gold for approximately $700 USD, this can be done via mygoldparty. Or cash4gold.

Armed with your utensils the only other thing you need to keep in mind is the daily gold price. This is where the fun begins, you source out any forms of gold jewellery, complete the test, make an offer for the gold way below market value and offer cash or cheque there and then. Most people, once they realise what their tired and tarnished jewellery is worth will jump at the chance to sell. You’ll have to brace yourself for paying out cheques at the start ranging from approximately $100 to say $300 for the old jewellery. Don’t lose heart because in the long term when you smelt the gold you’ll most likely double your money. There is generally a 10% cost in smelting the gold (2).

A friend of mind recently held a “Gold Party”. People where encouraged to bring in there old jewellery to have it valued. Most people turned out for the novelty of the party but he did pick up a few pieces of jewellery after people where slightly amazed at their worth. My friend said it didn’t take long before all his friends caught onto the gold trading idea too. An interesting suggestion that came out of his first party was that collectively people could unite and place all there jewellery to be smelted and the proceeds then split according to percentage of gold supplied.

Recently a new and interesting statistic produced by the Victorian Police annual report is that burglary’s in 2006 & 2007 has reduced. Unfortunately the recovery of stolen goods has dramatically decreased (3). Police reports have shown that the recovery of gold jewellery is especially difficult at the moment. It appears that the criminal element within Australia is just as opportunistic as any budding entrepreneur.

Will Burn

Footnotes