Founded in 2010

News & Entertainment for Mason City, Clear Lake & the Entire North Iowa Region

Record gold prices have sellers emptying jewelry boxes

MIAMI ó In more than 53 years of business, Louis Morningstar has never seen anything like the hundreds of people who have lined up during recent weeks in his downtown Hollywood, Fla., jewelry-and-pawn shop to sell their gold or use it to get loans. PHOTO: Graduate gemologist Bruce Handler, right, accredited by the Gemological Institute of America, shows King Jewelers customer Valerie Mafdal how an acid test is used to distinguish gold from base metals.|By Elaine Walker, McClatchy Newspapers

MIAMI ó In more than 53 years of business, Louis Morningstar has never seen anything like the hundreds of people who have lined up during recent weeks in his downtown Hollywood, Fla., jewelry-and-pawn shop to sell their gold or use it to get loans.

(PHOTO: Graduate gemologist Bruce Handler, right, accredited by the Gemological Institute of America, shows King Jewelers customer Valerie Mafdal how an acid test is used to distinguish gold from base metals.)

With gold hitting an all-time record of more than $1,900 an ounce recently, raiding the jewelry box has become a way for people to generate extra cash in these tough economic times.

“Most people are astonished with what they walk out with,” Morningstar said. “They never dreamed that what’s sitting at the bottom of their jewelry box could be worth a thousand dollars or more.”

The gold-selling business is bustling at jewelry stores, kiosks, coin stores and pawn shops. Add in online sales and home parties, and you’ve got a boom.

With gold prices so high, almost anyone willing to part with a few trinkets can walk out with a few hundred dollars; with only a small handful of gold, it’s easy to hit the $1,000 mark.

“With the economy not so good, people are taking advantage of it,” said John Albright, owner of Gables Coin&Stamp Shop in Coral Gables, Fla. “Most of them need the money to pay bills. They’ve been shopping around for the best price.”

Janet Shields is one of those customers. She arrived at Morningstar’s recently with a bag of gold jewelry, hoping it would generate enough money to pay her utility and grocery bills.

The Hollywood single mom has seen her work as a massage therapist dry up in recent years because of the recession. She’s already maxed out her credit cards, so now she’s selling whatever she can to get by. She already got $400 by selling the gold coins her aunt left her.

“It’s a very sad day,” said Shields, as she waited to see how much she would get for the necklaces, bracelets and charms, including the boy and girl charms for each of her children. “I don’t have any choice. I’m thankful I have something to sell.”

Gold is in the 11th year of a bull market. Investors typically turn to gold in times of economic uncertainty, seeking to diversify away from equities and currencies.

Since the financial crisis in 2008, central banks around the world have bought gold as a hedge against their foreign currency holdings. In August, South Korea announced it had bought gold for the first time in more than 10 years.

On some days, Gables Coin&Stamp will sell a dozen gold coins, and supplies have to be reordered multiple times a week.
“There is the belief that gold is a wonderful store of value,” said Richard Gotterer, managing director of Florida for Wescott Financial Advisory Group. “Gold makes people feel comfortable during economic uncertainty. The price is going up because investors are flocking to gold as a safe haven.”

It’s why gold’s ascent often correlates with a recession. In October 2007, gold sold for about $740 an ounce. It briefly broke $1,000 in March 2008. But it wasn’t until fall 2009 when gold prices rose solidly above $1,000 mark, then hitting $1,200 a year later.

In recent months, that climb has only accelerated amid concerns over the U.S. debt limit, financial crisis in Europe, a possible double dip recession and a faltering stock market. Gold prices are up nearly 40 percent in the past 12 months.
“Everybody wants to sell at the very highest point, but nobody has a crystal ball to be able to know when that is,” said Jeff Malvin, owner of Beverly’s Jewelers, which has three stores in South Florida.

As gold prices have risen, so has the competition for buying gold. Services like Cash4Gold and Money4Gold are part of the online craze that encourages consumers to mail in their gold. In almost every shopping center, you’ll find someone offering to buy gold. They’re also competing against independent consultants that offer private consultations or in-home parties.
There’s no standard price on how much shoppers will get for the jewelry. Some places will pay as much as 90 percent of the market value of gold, reduced based on how much below 24-karat the piece is. But others pay as little as 65 percent of the market value.

At King Jewelers in Aventura, Fla., most of the gold they buy is melted down at the store and used to create new pieces of jewelry. By comparison, most businesses buying gold jewelry in South Florida send it to a refinery and only act as middle men.

“We have a competitive advantage because we eliminate the refiner,” said Jonathan King, chief financial officer of the family-owned King Jewelers, which is why he estimate the store pays about 15 percent more.

Rachel Altchek, owner of A Golden Ticket, started her business two years ago and goes directly to clients around the tri-county area for private consultations or parties. She gives the hostess 10 percent of what she pays out at the party; often the events become fundraisers for schools or local charities.

“I can pay a lot more because I don’t have a storefront and any overhead,” said Altchek, who works out of her Coconut Grove, Fla., house.

Meredith Gussin has been to several of Altchek’s parties, selling chains, earrings, a class ring, sorority pin and bat mitzvah presents for about $1,200.

“You have all this jewelry you never use that you don’t even realize what you’re sitting on,” said Gussin, who lives in Pinecrest, Fla.

The good news for jewelers is that some customers like Gussin are using those profits to reinvest in new jewelry. That’s a plus for a market that has seen a fall-off in gold jewelry sales among customers paying moderately prices. The only business that remains strong is bridal jewelry, where the cost of the engagement ring is still more about the diamond.

Rising gold prices have sent price-conscious consumers to other metals. Some brides and grooms are buying wedding bands made from alternative metals like tungsten or titanium. Silver fashion jewelry has gained popularity, with designer collections featuring gold and diamond accents.

“You can get a heavy silver piece for $300 or $400, which makes a nice gift,” said Raju Khiatani, owner of Barclay’s Jewelers in downtown Miami. “That same piece in gold might cost $3,000 or $4,000.”|

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments

Even more news:

Need help with your website?
Call your local professional,
Breakthrough Web Design:
515-897-1144
or go to
BreakthroughWebDesign.com

Copyright 2022 – Internet Marketing Pros. of Iowa, Inc.
0
Would love your thoughts, please comment.x
()
x