Chasing dollars? Use some sense and do your research before selling any unwanted jewellery.

With the gold price hitting record highs, Australians are being urged to take part in a new gold rush by turning their old or unwanted jewellery into cash.

A swag of dealers is out there panning for gold, in some cases spruiking for business from temporary "pop-up" stalls in shopping malls or hosting Tupperware-style "parties".

But there are a few things you need to know about how gold is valued before you hand over Aunty Ruby's bracelet or that bit-too-"bling" birthday gift to be melted down and recycled.

In addition, the Jewellers' Association of Australia says consumers should check the bona fides of the business that wants to buy their precious metal.

Gold, which is officially quoted in US dollars, hit a record $US1226 ($1360) an ounce in December. Five years ago you could buy it for less than $US500 an ounce. At the turn of the century it was worth half that again.

The Wall Street Journal recently looked at it this way: If you'd melted down a Sydney 2000 Olympics gold medal you'd have got a mere $US80 at the price prevailing then, but if you melted down an - admittedly bigger - gold medal from the just-finished Vancouver Winter Games you'd have $500 worth of recycled gold.

The Perth Mint operates in the bullion investment market but in the past year its manager of visitor experience, Cathy Anza, has been handling inquiries from people coming into the Mint's store with second-hand jewellery to sell.

Anza refers them on to a local gold refinery because the Mint doesn't buy second-hand goods. Nevertheless, she's able to give a basic rundown on how to value your booty.

First, weigh the gold jewellery you want to sell, she says. While gold is measured in troy ounces, you should do this in grams. The Jewellers' Association recommends you ask the buyer to put their offer to you as a price per gram.

Working in grams simplifies things as there's a difference between the troy ounces in which gold is measured and the avoirdupois ounces you're used to working with elsewhere (a troy ounce is 31.1 grams, while a standard ounce is 28.4 grams).

Next, consider the purity of the gold in your jewellery. Pure gold is 24 carats, so 18-carat gold is 75 per cent pure and nine-carat gold is 37.5 per cent pure. (If you have more than one piece, separate your items into piles of the same purity before weighing each pile separately.)

Now you can multiply the weight by the purity to come up with how much gold you actually have - for example, 100 grams of 18-carat gold jewellery would melt down to 75 grams of gold.

Last, you need to multiply the amount of "pure" gold by the prevailing gold price so you're armed with a rough estimate of value to negotiate with a buyer. You can find the price per gram (rather than troy ounce) in Australian dollars at goldprice.org/gold-price-per-gram.html. At the time of writing it was about $40 a gram. (Or, take today's price of gold, convert it into Australian dollars, then divide by 31.1 to come up with the price per gram in Australian dollars.)

The price you'll be offered will almost certainly be less than your estimate, Anza says, because the buyer needs to make a profit. "There's an element of risk for them as well," she says. Until the jewellery is refined down there's no way of being absolutely sure of the purity.

The Jewellers' Association recently developed a consumer guide, 10 Tips for Selling Your Gold, in response to the growing interest in second-hand sales.

"The most important thing for consumers is to ensure they're selling their gold to a properly licensed company," a spokesman says.

"Companies or individuals buying gold must have a second-hand dealer's licence, so consumers should ask to see certification and licensing."

Having identified the type of gold in your jewellery yourself, watch the buyer weigh the gold on scales that should have been tested under state and territory controls, the spokesman says.

Sellers should shop around to obtain a minimum of three quotes.

"The price paid for second-hand gold will always be discounted against the gold price of the day, as the buyer is in the business to make a profit," the spokesman says. "That said, consumers should expect about 80 per cent of the spot price for gold per gram according to its carat value."

The association also points out that gold buyers generally only want the gold in your jewellery, not any stones, and you should be clear about whether you're being paid for the gems.

"You are well within your rights to ask for and keep the stones or get an additional quote separate from the price for the gold," it says in its consumer guide (jaa.com.au).

Gold Buyers Australia, which has shopping mall stalls and organises gold parties, says on its website: "There is no value placed on the stones or settings, only the gold, platinum or silver, therefore we recommend stones of value be removed prior to selling the gold pieces to Gold Buyers Australia."

The Jewellers' Association says it's possible your items could fetch more as intact pieces of actual jewellery, on the second-hand market, than as pieces of scrap. "Be extra careful with any jewellery passed down from great-grandma," it says.

If you have to leave your gold with a buyer for evaluation, get a detailed receipt, it says. If you're considering selling your gold to a company online or via the post, call them and speak to a real person first, asking the same questions you would in a store.

If you're invited to a "gold party", find out who's hosting it, who'll be doing the buying and what their relevant experience is, it says. Know what other companies are paying before you attend.

Key points

* Make your own estimate of the value of the gold jewellery you're thinking of selling.

* Obtain at least three quotes.

* Don't fall for a low-ball price amid the fun of a gold party.

* Check the buyer has a second-hand dealer's licence and calibrated scales.

* Consider whether you'd get more selling jewellery intact rather than as "scrap" metal.