With gold prices at an all-time high and expected to rise further, isn’t it time you start profiting off the precious commodity? One way to do this is by being a legitimate player in the lucrative ‘cash for gold’ trade.

Indeed, the price of gold surged last week to a record high of some US$1,588 an ounce as investors switched into the metal for safety against the background of the European sovereign debt crisis and stalling US debt-ceiling talks. What’s more is that analysts are predicting that the price could go up to as much as US$2,000 an ounce if the situation looms.

While some have merely watched gold put in a glittering performance the last six years with returns in excess of 150 per cent – including annual returns of 28 per cent and 24.4 per cent in 2010 and 2009 respectively – others have taken advantage of the development by becoming gold brokers – businesses engaged in the buying and selling of scrap gold.

The illegal cash for gold dealers have gained quite a bit of notoriety – police say gang leaders give large sums of money to members who can be seen on the streets of the Corporate Area in a bid to gather as much gold as they can; the gold is then sent to smelters in the US which pay large sums of US dollars for the items – but there are several legal traders such as the Khemlani family that have been quietly reaping profits from the business.

Starting a legit cash for gold operation is not hard, but insight and training are needed to build a viable business. Sunday Finance shares some of the items and skills needed:

* Knowledge in identifying and appraising gold – You can’t buy and sell gold if you are clueless about how to determine gold content – prices generally vary based on the value of the gold content. Read up on how to identify gold, purchase a gold testing kit and get as much practice as possible on scrap to sharpen your skills.

* Property – The Jamaica Customs Department requires second hand jewellery exporters to own and operate a jewellery store. The site will be inspected by a customs officer before an export licence is granted.

* Documents – Persons applying to become second hand jewellery exporters need to submit an application letter, company registration, tax payers registration, tax compliance certificate and a valid identification to the Customs Department. All the documentation is then forwarded to the Investigative Unit. Acting on the advice of the Investigative Unit, the manager of the Scrap Metal Unit makes the recommendation for permission to obtain the export licence. An export licence cost $4,136 and businesspersons are likely to need one every time they are exporting (See more

* Cash – Obviously, this is needed to purchase gold from clients.

* Weighing scale – You’ll need to weigh the gold to know how much it worth. Experts reccommend a digital postage scale.

* Marketing – This is a very important part of any business. In order to maintain a steady stream of clients, a strong marketing plan is needed. eHow contributor Michael Wolfe advises cash for gold dealers to consider both their market and strongest selling point when developing advertising material. He says persons advertising to low-income communities should emphasize the high prices offered while those pitching their business to a more upscale audience, should emphasize convenience.

PROCEDURE TO EXPORT SECOND HAND JEWELLERY

1. Each shipment of gold must be inspected before smelting and inspection form signed by a Customs Officer. (This can be done at the exporter’s place of business).

2. During inspection of the Second Hand Jewellery the procurement documents will be examined by the Customs Officer.

3. Upon applying for the export licence the inspection form signed by a Customs Officer must be presented at the Trade Board along with the letter of approval.

4. An entry must accompany each shipment of Second Hand Jewellery being exported.

Source: Jamaica Customs Department