According to the World Gold Council there was 1,212 metric tons of old gold scrap recycled in 2008. This accounts for over one third of the supply. Learn where it came from and how you can profit from this phenomenon.

Over the past year gold has been on the minds of many people. This is due to it's rise in value. Anyone who has unwanted gold laying around, specifically jewelry, is rushing to cash in on the high returns they can receive.

The evidence shows this because already in the first two quarters of 2009 there has been nearly 1000 tons recycled and sent to refineries, almost as much as the entire year of 2008. That means the volume has nearly doubled from last year.

This phenomenon creates an excellent opportunity for investors looking to buy and for entrepreneurs looking to start up a gold buying service.

The advantage for investors is the ability to obtain it at a lower price. Instead of paying the normal spot price plus a premium, when buying bullion coins and bars, they can buy scrap gold much lower. Then they can hold it in it's original form or trade it in for bullion at any precious metals refinery.

For entrepreneurs, it offers a very profitable opportunity to started in the service business of recycling gold.

Almost everyone has some amount of gold that they no longer want or need and are willing to sell. In fact, the price is so high that many people are selling it at a higher price than they purchased it for at retail, especially if it was bought prior to 2000.

When starting a gold buying service you have the chance to make some excellent profits just by being the middle man. You simply buy from individuals and resell it to a refinery.
You can actually get started by operating right out of your house and, depending on your ambitions, it can grow into a full time storefront operation.

Getting started on a small scale is rather inexpensive. Just place a classified in your local paper and hand out some business cards. When a seller contacts you, simply meet with them right at your kitchen table, go to their house, or meet them at a coffee shop.

Several tools to analyze the gold are necessary and can be purchased from any jewelry supply company. You will need a 10X jewelers loupe to inspect the items, an acid test kit to be sure the gold is authentic and a scale to determine the weight.

Once you know the exact quantity they have, simply make them an offer to buy. It's best to offer about 50% of the spot gold value to protect yourself against loss, just in case you make a mistake in the testing process.

After you have made the purchase you can send your scrap gold to the refinery of your choice. They will assay it and within a few days you will receive a check.

As I stated earlier, in 2009 there was nearly as much scrap gold recycled in just the first two quarters as there was in the entire year 2008. This spells opportunity for those looking to capitalize on a trend that will continue for a long time.

The question is, how much of the 1,212 tons will you buy?