By RICK MALWITZ
EAST BRUNSWICK —Last week John Lyons of Ringoes came to the National Estate Jewelry Buyers here to have some jewelry repaired. In addition to the jewelry that he wanted fixed he had a small necklace to sell.
The necklace, he explained, “Was going to sit in the drawer forever.”
Buyer Joe Auriemma weighed the necklace, did the math — based on that day’s gold price of $712.50 an ounce – and gave Lyons $25.
“That pays for gas,” said Lyons.
“We’ve never been busier, in the 10 years I have been here,” said Barry Blank, the owner of the National Estate store on Route 18. “We’re buying tremendous quantities of gold, silver, coins, even diamonds.”
“People no longer want the jewelry, or they just inherited it,” said Blank, a third generation jeweler.
“Or they need the money,” he said.
“I find dealers are scrambling for as much gold as they can get,” said Robert Minichino, operates Central Jersey Rare Coins in Bound Brook, where he buys and sells gold coins, including the American Eagle and the American Eagle, the Canadian Maple Leaf and the South African Krugerrand.
“Dealers are paying over the price of gold,” said Minichino, referring to the price listed on the the New York Mercantile Exchange.
“Just about everybody’s getting rid of their old stuff,” said Russell Bauman of Walter Bauman Jewelers, a family-owned business that operates a chain of jewelry stores in New Jersey. “All women have at least $300 of old gold sitting in their drawer.”
“It started about a year and a half ago,” said Freddie Bauman, president of the family chain, of the recent gold rush. “At first the prices gave them a motivation to sell. Then we started seeing people coming in for gas money,” she said.
Joseph D’Esposito, owner of South River Jewelry and Clock Shop on Main Street in South River, said people selling gold have said things like, “I need to pay my bills. I don’t wear this anymore.”
One seller sold gold to pay for her daughter to go to cheerleading camp, according to D’Esposito.
“People are saying the mortgage is more important,” than holding onto their gold, said Donna Yi, sales manager for Venus Jewelers in Franklin.
Cash for Gold USA, an Internet site that offers customers a chance to mail in pieces of gold — anything from class rings to dental fillings — in exchange for a check, has seen business quadruple in recent months, said company spokesman Steve Schneider.
“Right now people are very worried,” said Schneider. “The aesthetic value is now being outweighed by the precious metal value.”
In midtown Manhattan, Gene Furman, the owner of Empire Gold Buyers, has seen a roughly 25 percent increase in walk-in traffic since major investment banks and other financial institutions ran into their own financial difficulties.
“You name it, they sell it,” Furman said. “People have to pay their mortgages. People have to pay their bills.”
It has always been assumed that gold is a great hedge during poor economic times. Howver, as the stock market has been in serious decline, the price of gold has also been in decline.
Last week the price of gold briefly fell below $700 an ounce for the first time in 14 months, as sellers, according to analysts, needed money to deal with a larger crisis: They were taking a bath in the stock market.
Jeffrey Nichols, managing director of American Precious Metals Advisors, blamed gold’s slide on what he called, “massive indiscriminate liquidation” by large investors worried about the health of the global economy.
“You really should have been selling in March,” said Minichino.
On March 17 the price of gold peaked at $1,033.39 an ounce.
In other words — as anyone who has been managing their 401(k) understands too well — timing is everything.
So who knows where gold is headed?
“I used to know that, but (the price of gold) doesn’t make sense anymore,” said Blank.
“It used to be when the Dow went up gold went down, and the inverse was true, too,” he said.
However, the Dow has plummeted since March, and so has the price of gold.
Gold had previously peaked in 1979 and 1980, topping off at about $850 an ounce. Then it plummeted and leveled off for more than two decades, hovering between $250 and $300, said Blank, before beginning the present climb.
Asked if he knew where gold was headed, Auriemma said, “If I knew I’d be a millionaire.”
While some people are scouring their jewelry boxes to find jewelry they no longer want or need, others are still coming to stores to purchase jewelry.
“Business is not great,” said Yi. “But as long as there is love and lust and men messing up, people will be buying jewelry.”
The Associated Press contributed to this report.
Rick Malwitz:
(732) 565-7291
Rmalwitz@mycentraljersey.com:
Source: http://www.mycentraljersey.com/
