You’ve seen those commercials, we’ve all seen them and they say “send us your gold and will send you cash,” and it’s a tempting promise especially during the recession but is it one you can bank on? Consumer correspondent Elizabeth Leamy, right here right now to tell us the result of her investigation.

Good morning here’s some of the gold we sent out. Right here we sent some of it to the industry leader Cash4Gold and also to two other mail-in companies that we chose at random, Dollars4Gold and Get Gold Cash.

Now is the time to send your unwanted gold for cash.

Call it the gold rush of 2009, it’s suddenly such a lucrative business that industry pioneer Cash4Gold was able to afford a coveted Super bowl commercial.

I can get cash for this gold medallion of me wearing a gold medallion!

But is it a golden opportunity for you? To find out we assembled three packets of gold and had master gemologist appraiser Don Palmieri and his team verify that every piece was 14 carat gold.  Based on the carats, the weight and the price of gold that day, Don said we could see optimum offers of about $350 for each packet.

Thank you. You’re welcome.

We wanted to verify that we could get that price so we visited a store at Manhattan without identifying ourselves. Sure enough, the jeweler there tested our gold and offered us $345 for each.

$345. Ok thanks!

So we sent our packets off to Cash4Gold, Dollars4Gold, and Get Gold Cash. A few days later we started getting offers.

Get Gold Cash promises reliable compensation on its website. So how did the company want to compensate us – with $206. When we said,“No thanks.” Get Gold Cash immediately raised its offer to $275. But remember our appraiser said we could get as much as $350 for our gold. The Baltimore based company later told us it does not pay as much as New York buyers do.

Next stop Dollars4Gold which promises top dollar for your jewelry. In a new twist, this company said some of our pieces were only 10 or 12 carats even though our state of the art testing showed everyone was actually 14 carats. Dollars4Gold’s offer – $89.71.

D.B.: If I was looking to get $350 for my items and I got $89 for them then I would not be happy. We commit to the consumer that if they aren’t happy with our payment for any reason we’ll go ahead and send their material back to them with no questions asked.

(Commercial): We mailed and go baby.

That leaves Cash4Gold, the biggest in the business.

(Commercial): Goodbye old friend.

Cash4Gold has a D rating with the Better Business Bureau.

B.W.: That means that we have enough concerns about this company that we recommend caution in doing business with it.

300 customers have complained to the BBB in the past year mostly about the price they were offered. So what did we get from Cash4Gold? We showed the company’s offer to our expert.

E.L.: and here is what they offered us $66.05.

D.P.: Wow! That is incredible.

E.L.: Incredible how?

D.P.:  It’s incredibly low.

We called and asked for our gold back and option all customers have. Then the company more than doubled its offer to a $137.

E.L.: Does that make it better to you?

D.P.: It’s still pennies on the dollar.

We asked Cash4Gold CEO Jeff Aronson why his company offered us a $137, $208 less than what we were able to get elsewhere.

E.L.: Why so low?

J.A.: That’s what that material was worth to me at that time. That’s what is worth to me to process. I make no apologies for pricing whatsoever. I’m a service business.

Cash4Gold points out that its own website states that it is not the best price option for all customers. The company said that its BBB complaints represent a tiny fraction of its business and it expects a higher rating soon. Cash4Gold says its customers are focused on service and convenience rather than price.

E.L.: Aren’t you cashing in on the fact that people don’t know the value of their gold?

J.A.: Oh my God no! If all you care about is the net dollar and you’re willing to go to city part of town and you’re willing to travel around, I want you to go there. I don’t want you to come to me. I want you to come to me for convenience and ease.

So if you have gold to sell it’s up to you to decide what’s more important – convenience or cost?

The Cripple Creek District, known on its heyday as the world’s greatest gold camp, lies on the back side of Pikes Peak in Colorado and what is commonly known as the Cold Era. This ancient volcano located in the 39 mile volcanic field, measures roughly 6 square miles and is surrounded on all sides by a roughen crumbly combination of quartz, feldspar, and mica.

At the edge of the Cold Era, is what is known today as Mt. Pisgah. Over 35 million years ago, 10,400 foot tall Mt. Pisgah, was just another small volcano. When the larger volcano collapsed, after erupting through older rock, giant boulder shattered around the basin. Mineral-riched solutions including gold flowed into the faults and fissures created by the collapse. The veins cooled, condensed and hardened over time.

Unlike 95% of the gold on the planet, Cripple Creek Gold actually looks gray on its natural form due to the intense heat from this process.

E.H.: This gold deposit is unique in some ways. It’s very large. It’s not as rich as some say the golden mine in Australia but I think for total ounces that have been and will be produced, that it ranks I would guess among the top 4 or 5 gold districts of the world.

In 1891, Cowboy Bob Womack convinced others that gold existed in this district and the boom was on. In time, the Cripple Creek District expands 24 square miles with 25 towns and counties as well as 100 of mines.

33 millionaires including Winfield Scott Stratton, James Byrnes, Ed Dela Vern, Albert Carlton, Spencer Penrose, and Charles Tutt regenerated in the next 15 years.

By 1896, over 19 million dollars of gold had been produced. There were 350 working mines and about 30 assayers work in the district.

The word assay or cupellation as it is known today means to separate valuable metals such as gold or silver from base materials such as lead. During the 1800’s, cupellation was known as fire assay. Surprisingly, the assay process has not changed much over the last 100 years. Gold ore is still blasted, crushed, separated, powdered, and assay to assess the value of gold for a ton of ore.

100 years ago, assayers supply the variety of chemicals such as mercury, carbon, and acid for use in the assay process.  They were mixed with crushed ore to find out the pure gold content. Assaying is an important part of the mining process since the technique tells how much pure gold is in the rock as well as its value.

Today, the Cripple Creek and Victor Mine has picked up where the gold boom left off. The mine’s majority owner, AngloGold Ashanti mines gold in ten other countries including Russia, China, Australia, and Brazil. The Cripple Creek – Victor Mine is its only North American operation. Since 1995, the Cripple Creek and Victor Mine has processed over 20 million tons of gold ore in the Cripple Creek District. By 2004, the mine has produced an amazing two million ounces of 99 or ½% pure gold.

Back in 1899, the United Mine Tunnel was built to process gold ore lying in the city of Victor. The tunnel emptied out into what was later called Eclipse Gulch. Victor fathers, Harry and Frank Woods, finance the construction of a huge mill called the Egonomic Gold Extraction Company. In its time, the Egonomic gained prominence as one of the first mills to use a chlorination process to refine gold in the district. Furnaces at the mill were fired by crude oil brought up on the Florence and Cripple Creek Railroad which ran nearby. Up to this point both the Florence and Cripple Creek and Colorado Midland Terminal Railroad had serviced the mines by hauling ore out of the district to be processed. At its peak, the Egonomic was processing 300 tons of ore daily. Even Theodore Roosevelt was impressed during a visit in 1901.

Unlike the old days of processing large amounts of gold, open pits are blasted and bulldozed to mine the ore. Today, the Cripple Creek and Victor Mine uses the heap leaching process to remove gold from the earth. After the gold is assayed, ore is heat on to a padded leach pad with cyanide and other chemicals. Next, the gold is processed through carbon columns and kilns. After passing through a tilted furnace and electrolytic tank, the gold is then poured in to cones. This last process varies slightly from the days when miners muck the gold themselves – shipped at above ground and settled by a wagon or train to be processed. During the late 1800’s and early 1900’s, the closest mill was The Golden Cycle located at the Colorado City and the west side of Colorado Springs.

In 1935, President Franklin D. Roosevelt successfully requested congress to set the price of gold at $35 per ounce. The actual result of it, increased mining but hard rock mining in the Cripple Creek district became increasingly expensive. For the construction of the Carlton Mill in 1949, the Golden Cycle mill in Colorado City fell in to disuse. Although the Cripple Creek District still ranks as the 5^th most valuable gold camp in the world, hard rock mining became too expensive and the mines of the Cripple Creek District closed down one by one.

Some say it was singer John Denver who revived an interesting Colorado in 1970’s. But the revival included a new interesting mining especially under President Richard Nixon eradicated President Franklin Roosevelt’s gold standard so that the price of gold could rise in 1970.

Today the Cripple Creek and Victor Mine is the largest operation in Teller County and the biggest open pit mine in Colorado. Smaller mining operations also continued to work around the district.

Here at the Cripple Creek District Museum, the 1890’s assay office offers the only glimpse into mining techniques in the past.

E.H.: I think that today the geologist, geophysicist, and engineers who’ve worked on these deposits can learn from the work that has been done in the lifetime. They learn and have been able to do some of the things today because they didn’t have to repeat what people did 100 years ago.

Veronica: In the hot of Bangkok’s gold district, business is good. Everyone’s buying whatever they can afford. In Thailand, earning gold is possibly culture and that’s been going on for years. So it’s not at all unusual for a fruit vendor of apparently modus means like these to sink all their savings into gold.

Sometimes I’ve told that wall hand and buy Boolean box.
So in here what have we got, maybe a hundred thousand US dollars worth of gold?

Tanarat: Yes, it seems close to. Yes.

Veronica: Tanarat Pasawongse is a third generation gold trader.

Tanarat: In the Asian countries at least most of them have some Chinese background so the Chinese they believe in gold as something for luck. If you see, every Chinese New Year no matter how expensive the gold price is, the grandmother will, no matter how many kids she has, how many more grandchildren she has, she would buy it anyways for the kids every year.

Veronica: The family business has scaled up and gone global in keeping with the times. Upstairs from the traditional retail shop there are trading rooms for gold orders and features in kinds of gold back financial products to suit the needs of all customers. Even with gold hovering at all time highs they can’t seem to get enough.

This week the room’s been busy with hundreds of people hoping to make some money amid the global stocks sell off in currency interventions. One investment bank’s predicting that gold will reach 2500 US dollars in ounce by the end of the year. Around the world that’s a lot of anxiety about the financial markets in failing competence and institutions. There’s a strong sense that risks are high. And that’s always when gold shines. Veronica Pedrosa, Al Jazeera Bangkok.

For any  investor, owning stocks of gold for the last few days have been a nerve-wracking time. The sell-off over the last four trading sessions has been the worst since February 1983.

After hitting a high of $1900 an ounce in early Septermber, it fell to just above $1500 on Monday. But if you bought gold at it’s low of $275 an ounce back in January 2001, you would still be sitting on a fortune. In fact, gold is experienced it’s longest bullrun since the 1920′s.

The drop over the last few trading sessions however, is significant. With people such as these Greek transport workers facing the possibility of more government spending cuts, investors are concern about the possibility of a second global recession.

European policy makers are struggling to resolve the region’s debt crisis, and such fears would normally drive the price of gold higher. But with the commodity already at such lofty heights , many investors now feel the only really safe bet is cash itself, and hence the selling. Also hedge funds and other large speculators have reportedly sold off around 11% of their gold contracts. That’s based on analysis of data from the  US Commodity Futures Trading Commission.

It’s still too early to say for sure whether the recent drop is a temporary air pocket or whether it’s the start of a longer term slide. But the price of gold is driven as much by investor’s hearts as their heads. It’s relative scarcity and the difficulty of extracting it will always ensure it holds a special place in people’s minds.

Well, It’s official Ballarat is back in the gold business, It may not be in a Gold Rush, but It’s a welcome boost to a town that was once an epicentre of Australia Gold Industry and It’s all thanks to the company that bought the old Ballarat mine last year tracing the rising price of William. It’s Christian Vaness report is now reported it’s first gold bar!.
C.Vaness : Ballarat is the city build by gold and on gold. On the edge of the CVD, about 500 meters below the surface, Miners are busy drilling. (Drilling Sound)
Castlemaine Goldfields bought the Ballarat Mine last year and finally, It’s mined enough to pull the first gold bar.

Matthew Gill, Castlemaine Goldfielders : Certainly the current financial issues have been great for gold, but I think you also need some stronger economy as well.

C.Vaness : While the price of gold has slipped recently. It’s over rule strength has made outside slack Ballarat viable again. The Gold price is currently hovering around S1600 an ounce.

Dr. Sandra Close, Surbiton Associates: This is the last few year we’ve seen arising production and arising several new mine and a lot of rejuvenated old mine opening up.

C.Vaness : “Castlemaine Goldfields has jobs riding on the mine success but it’s confident, It’s future is strong.”

Matthew Gill, Castlemaine Goldfielders : Once you take away our trading cost, we should be spitting out a good profit cost around 20 or 30 million dollars a year.

C.Vaness : But these is by no mean a return gold rush of the 1850’s seen in Ballarat and Bendigo. The reopened Ballarat is relatively small and what return Victoria to it’s historic golden mental.

Dr. Sandra Close, Surbiton Associates: W.A. is the big one with 70-75% of Australia’s gold production, Victoria is down around 1 or 2% these days.

C.Vaness: But history would indicate; “where there’s gold, there’s always someone willing to try their luck.” Christian Vaness, ABC News.

This is world war three. It’s Gold versus Paper. It’s offthenticity like Gold versus inoffthenticity like the American Paper Empire. It’s about a new century with new values. And it’s about the country like the US with only paper behind it crumbling.

And the other interesting thing here is that many gold analyst around the world claim that there’s a conspiracy theory to think that the US government or the CME or Colmax with intervene in the gold market.

But here is goldmensex one of the gold traders in the world. One of the biggest clarity traders in the world who knows this market and they’re saying, they’re suggesting that there’s government intervension.

But Goldman is now agreeing with gold act anti trust action committee gaatac.org which for years old and the welderness people said out of conspiracy theory now goldmansex mainstream online smartest down there on wallstreeters saying yes some sex data is correct, price of gold is manipulated by the paper horse.

And off course in every single war there side up and not exactly what mangoldsex refers to phsycological damage. And I wanna show you quick headline in response to earlier this week when gold fell 50 dollars in a matter of minutes Joeyson tall said yow. Look what gold just did! So there’s a psycological impact they’re looking for.

Ron Paul (RP): Very quickly if you could answer another question because I am
curious about this. You know, the price of gold today is $1580. The dollar (??) three
years was devalued almost 50%. When you wake up in the morning, do you care about
the price of gold?

Ben Bernanke (BB): Well, I pay attention to the price of gold but I think it reflects a lot
of things. It reflects global uncertainties. The reason people hold gold is that the
protection against what we call tail risk – really really bad outcomes. And to the extent
that the last few years had made people more worried about potential of a major crisis.
Then, they have golds for protection.

Ron Paul:Do you think that gold is money?

BBernanke: No.

Ron Paul: It’s not money.

Bernanke: It’s a precious metal.

Ron Paul: Even if it has been money for six thousand years, somebody reversed that and
eliminated that economic law?

Bernanke: Well, it’s an asset. Would you say treasury bills are money? I don’t think they’re
money to you but they’re financial assets.

Ron Paul: Why do central banks hold it?

Bernanke: It’s a form of reserve.

Ron Paul: Why not they hold diamonds?

Bernanke: Well, it’s tradition. Long term tradition.

Ron Paul: Well, some people still think it’s money.

The commodities market I know you think there’s a secular bull market there crv index is down 12% since the end of April. Have you re-evaluated any of your commodity  investments on more of a short term basis?

Why? Because they are down 12%?  I think Ronda, markets go up at….at…. markets have 30 – 40 -50% corrections all the time. If you look at the top and bottom of any asset, any stock, anything in any one year the range between the bottom and top is at least 30 to 40 to 60%. No, 12% no, that’s the way markets work.

So let me ask you about 1 commodity in particular especially if we are printing money all over the place, is gold undervalued right now?

Well I own gold, I wouldn’t buy gold at the moment, if the gold is down I certainly would buy more gold, I’m not selling it. You know Ronda, gold has been up for 10 years in a row that’s pretty unusual for any asset it looks like it might be up 11 years in a row, maybe it’s going to go up 14 years in a row, I don’t know but I don’t want to buy gold right now but if it goes down I’m going to buy a lot more.

Anything else in the metals ? Copper, silver ?

Well, Silver… silver  goes down and I had to buy one today I’d buy silver because it is 25% below it’s all time high while gold recently made an all time high. But I’m not buying either today if I’d be buying anything today I’d buy agriculture.

What about the issue though if we do see this economic  slowdown, severe recessions that you would have an impact with commodity demand, short term at least.

Well of course, I got shorts, I mean I’m  long on commodities and some currencies, I’ve sold short European stocks, I’ve sold short emerging market stocks, I’ve sold short American technology stocks. So sure the kind of scenario you vow on, my shorts I hope will protect me, and in that kind of scenario Ronda they’re going to print more money and when they print more money you want to own real assets, you want to own commodities and there’s shortages in commodities.

In the 1970’s Ronda we had terrible economies and terrible stock markets all over the world, commodities went through the roof. We had one of the great bull markets of all times in commodities and people made fortunes if they owned commodities and were short stocks or avoided stocks. We have the 1970’s again.

In term of the agg markets is that across the board ? Corn, wheat, sugar, soy

My lawyer won’t let me buy individual commodities so I own the Roger commodities, the agriculture commodities, I own all the Roger  commodity indexes I especially own the Roger agriculture index.

Gold is one of the softest and most malleable of the metals. It can be pressed extremely thin, crafted into shapes even drawn out to form a fine ware and all without breaking. Gold isn’t affected by water or oxygen as many metals are so it doesn’t rust or tarnish either.

Most gold comes from low deposits also called vein deposits concentration of gold and other metals in the cracks of rocks, low deposits require hard rock mining the process of removing gold bearing rock called all by drilling and blasting. Miners descend more than half a kilometer on the ground. There they drill holes for explosives using what’s called a long hole and drill.

They drill in a specific pattern set out in a plan prepared by the mines engineers. The engineers know exactly where those veins of gold are thanks to the mining companies’ geologist who studied the ore samples.

The company collects this samples by drilling deep into the rock at fifteen meter intervals, this diamond drill course as they called are up to 100 meters long and measures 3  ½ centimeters in diameter. Gold in its natural state isn’t pure, it’s usually intertwined with silver or other metals, so the mined ore has to be processed afterward to isolate and extract the gold. A metric ton of ore yields only about 6 ½ grams of gold.

Chavez orders 11 billion dollars of gold home. Venzuela’s finance minister Jorge Girodani said that “the weakening US dollar and the European sovereign debt crisis threaten Venezuela’s saving and they will be more secure at home and in “allied” countries.”

Yeah, that’s right – the various gold hoards by various countries are not held in those various countries. We talked at length on this show about Germany – %60 of their gold is held in America.

Now Hugo Chavez in Venezuela is saying  – “We want our gold, 200 tons of it, to be brought home, held in the bank of England”. And of course the Bank of England is not the only one holding that gold, the custodians also include banks such as JP Morgan.

So, it’s as if Hugo Chavez watch our show, realize that the crashed JP Morgan buy silver campaign could be applied to gold, is demanding physical delivery of his gold, because he knows that if JP Morgan and these other banks don’t actually have the physical gold, they have to go into the market buy that gold, but they’re bankrupt to begin with.

That means they have to incur more debt, which mean that they’re going – he’s trying to collapse JP Morgan just like we’re trying to collapse JP Morgan, so, Hugo Chavez, welcome to the gold liberation army!