Posted on 03/14/2008 10:14:39 AM PDT by LibWhacker
CHICAGO (AP) — A new kind of gold rush is unfolding at jewelry store and pawn shop counters — featuring not prospectors, but consumers.
White-collar workers, retirees and many others have been digging through jewelry boxes and safety deposit boxes to cash in as gold prices flirt with $1,000 an ounce. Coins, old wedding rings, necklaces given by ex-boyfriends, hand-me-down gold pieces — everything is fair game when it brings this kind of profit.
Shop owners across the country are marveling about the phenomenon they say began in the latter part of 2007 and accelerated through the winter, reflecting torrid gold demand like none had ever seen. There are even gold parties, where people gather to sell their jewelry.
"Everybody's trying to sell," said Richard Rozhko, owner of a jewelry store on the northern edge of Chicago. "People are trying to cash out because they don't believe that gold's going to go higher than $1,000 or $1,200" an ounce.
Rachel Weingarten, a New Yorker with a self-described obsession with "shiny trinkets," didn't need to sell but couldn't resist the chance when she saw prices soar like an overinflated tech stock.
"When I saw the prices going through the roof, I saw it as an amazing opportunity to rid myself of jewelry that no longer suits my taste or status," said Weingarten, a marketing consultant. "It's also been a lot of fun to get cash for stuff that is broken or just really ugly or just takes up room in my drawers."
Royal Pawn Shop, a 75-year-old business within earshot of the rattle of passing El trains in Chicago's South Loop, has display cases sporting fancy gold rings, bracelets and watches along with racks holding hundreds of pawned fur coats. It also has more office workers as customers these days — mostly sellers, not buyers, bringing in gold chains and rings.
"It's stuff that's lying around the house, so they figure: Why not make money from it?" said co-owner Wayne Cohen. "The price of gold is so ridiculously high that they'd be stupid not to get rid of it."
Others are selling to help cope with tough times in an economic slowdown.
Three miles across town, Division Gold store owner John Vela recounted housewives coming in to pawn treasured items from their jewelry boxes and numerous clients saying they need money to pay their property tax bills and take care of other rising financial obligations.
"I have mortgage brokers, real estate agents, retail shop owners. They're nervous, you can see the stress on their faces," he said. "Many haven't been to a pawn shop before — they want to know how it works. Some don't want to let go of their gold. (But) gold is cash to them."
Silver also is stirring customers to sell more, with prices having more than tripled from $6 per troy ounce two years ago to over $20.
The stories are similar elsewhere.
At Gold Star Pawn Shop in Eastlake, Ohio, where the Cleveland-area economy is suffering, manager Marc Berman said people come in regularly with broken gold chains, rings with marks on them and scrap gold to get more money in their pockets.
"I think it's more about gas prices than anything else," he said. "People are bringing in anything to try to get money to put a few gallons in the tank."
Some seniors come in monthly to pawn gold items in order to make it through until their next Social Security checks arrive, Berman said.
The clientele at Palace Pawnbrokers in downtown San Diego has gone more upscale as gold prices have soared. Owner Jeff Bernard said it's a mixture of those who seem to need the money more than ever and those who want it.
"It's a combination of many factors — the state of the economy, the price of a gallon of unleaded gas going for $3.60 here," he said. "People are saying 'We've just got to do something.' With gold knocking on the $1,000 door, they can actually pay off a bill, do something significant with it."
One woman recently lugged a safety deposit box full of old wedding rings, chains and gaudy 14-karat jewelry from the 1970s in to Scott Goldstein's Super Pawn shop in Round Lake Beach, Ill. Others have arrived carrying shoeboxes full of jewelry, and a 92-year-old man brought in 80 gold coins. Customers have brought in as much as 40 ounces of gold to sell, he said.
"It's people going through hard times AND the crazy prices," Goldstein said of the crush that began there after Christmas. "With all the foreclosures nowadays, you hear people more and more saying 'I've got a mortgage to pay.'"
Midge Elias watched prices rise for months until she finally gave in to the temptation and walked into a Manhattan coin shop with two mounted Liberty Walking gold pieces she'd once worn on long chains. She left with a check for $1,150.
"It felt like a little gift," Elias said. "Of course, there's always the possibility of gold going way higher. But hey, those are the risks."
“Liberty Walking gold pieces”
If those are one ounces pieces she was taken at $1150 total.
My family owns a small gold claim in Idaho. At $1,000/ounce, it has become worth it to spend the summer working the claim.
No kidding. Even the new ones are selling at $1037 each.
I was advised NOT to buy GOLD when it was $300 an ounce....
Regardless of its volitility, with wars, chicken little economic forcasts, and constant media hype of "all bad news-all of the time", GOLD is a fair investment.
“I was advised NOT to buy GOLD when it was $300 an ounce....”
Yes, there were/are a lot of advocates fiat money (anti-gold) voices here on FR, which is quite sad.
The bikes are all tweaked and everything I need is within one mile radius of the house.
No, I'm not kidding.
I was advised on this board not to buy at $400, but I did anyways. I was told to sell at $500, $600, $700, etc... I did not. The same for Silver since I bought it at $7.
Some people just don’t get it. Until the dollar reverses it’s trend and we stop spending more than we make, investments like metals will keep climbing.
Really? Odd. I would've if I had had the money to.
Now at $450, I probably wouldn't have, and almost certainly not after $700. 20/20 Hindsight.
Hey, I didn't think silver was a bargain at $6.00-$7.00 which was almost double its low from the 90s.
And, no, I won't invest now because I just have to believe that it couldn't get worse. (even if I think it will)
Some years ago I had an opportunity to talk to a gold mine owner in Michigan. He could make a profit if the price stayed over $400 per ounce. The process was:
1 hard rock shaft mining. Three employees.
2 transport via truck to a mill.
3 chemical process to retrieve the gold.
After that the yield was 1/4 ounce per ton. I think that these gold buying events are a scam to ripoff the public.
A neighbor of mine gold plates automotive parts. He buys emblems from the manufacturer, for around $200 set, gold plates them, about $1.25, and sells them for better than $600 per set. Buyer, or in this case, seller beware.
Good for you, but according to most on this site you are a loony “doom and gloomer”. Personally, I will be stocking up on ammo. If the house of cards our economy is built on collapses, it won’t be pretty. They didn’t have an over abundance of gangs and illegal immigrants the last time.
At the rate gold is climbing some people should be careful about getting their teeth knocked out!
I hope rappers and other thugs have good dental plans.
;)
Indeed. Moral of this story: do not sell outright to a dealer. Same is true of collectible stamps.
Better start putting your gold and silver in safety deposit boxes or safes........crime is going to "take off!"
There are a lot of closed up mine claims in the CA hills too.
It would fun to see some of them get active again, if insurance and enviro regs allow.
Smart moves all. Good luck, and I hope you own your home property outright.
Calling the Hunt Brothers...
I remember, not too long ago, where the phrase “Gold bug” was thrown around as an insult.
That said, I do think it is a bubble, in spite of what the dollar is doing. Mining stocks seem to think gold is worth about $600.
Mike Hunt? Oops, wrong thread.
I was pounding the table on silver at $5 and $6. A maniac. Too bad I didn’t see it for sub-300 gold. At $5-6, you cannot dig the dirt, separate the silver ore, smelt the silver, assay the silver, and pour it into ingots. Even at $9 oil, the intrinsic value of the item is more than the sum of the inputs that are required to make it. It’s no different than a slice of bologna for 1/3 cent.
I had a friend who had an employee who went to Mexico 5-6 times a year. I gave him $200 to buy Onzas, a Mexican 1-oz silver coin, when silver was $6. You cannot bring in more than 20 oz without declaring them, so I told him to get 18 of them.
“no problemo, they have areas in Mexico City where they sell them by the kilo”
“Great, buy 19 and keep one for yourself”
On his return: “Gee, I couldn’t get to it.”
Try again. Silver $6.25
On his return: “Gee, I couldn’t get to it.”
Try again. Silver $6.40
On his return: “Gee, I couldn’t get to it.”
Try again. Silver $6.85
On his return: “Gee, I couldn’t get to it.”
Try again. Silver $7.10
On his return: “Gee, I couldn’t get to it.”
Try again. Silver $7.40
On his return: “Gee, I couldn’t get to it.”
Try again. Silver $7.75
On his return: “Gee, I couldn’t get to it.”
Try again. Silver $8
On his return: “Gee, I couldn’t get to it.”
On his return: {me} I am going to kill you. Do not fail.
“OK, I promise”
On his return: Hey, all those guys disappeared and nobody wants to sell them any more.
*^#$_(*^#*$#$+)#
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.