By:Frank Szivos, Contributing Writer
Call it gold rush fever as consumers cash in on the rising price of gold at their local jewelers. In a down economy, where many of your assets might be dwindling as fast as the snow on your lawn, there is a glint of good news: the value of your gold jewelry has risen-a lot.
The price of gold has climbed to all time highs, hovering close to $1,000 an ounce, and you could cash in on this. It might pay off to prospect through your jewelry boxes, bureau and desk drawers and turn your nuggets of gold into cash.
Bob Sussman, owner of Fairfield Center Jewelers, has seen an increase of customers coming into his store to trade in their gold jewelry for cash or use it as a down payment on more expensive pieces.
“We are seeing many people parlaying their gold jewelry,” Sussman said. “It’s a great time to trade in or sell gold outright. The price is good and you might as well take advantage of it.”
Since Harold Shaw, owner of Shaw Jewelers in Fairfield, started buying gold a couple of years ago, he’s also witnessed more traffic in his store lately as the price keeps rising. However, he would be just as happy to see gold prices drop since escalating value drives up the price tag on new pieces.
“We’ve seen the price of gold rising for some time,” Shaw explained. “Investors worldwide are turning to gold as a hedge against inflation. It’s a lot like when the price of oil shot up because of investors buying it up.”
John Green, owner of Lux Bond & Green in Westport, pointed out that there’s plenty of gold jewelry out there because consumers bought more during the “fat” times before the economic downturn.
So what economic influences are driving up the price of gold? Gregory Koutmos, professor of finance at Fairfield University, said many speculators are buying gold as a hedge against inflation. Influencing this attitude is the devaluation of the U.S. dollar.
“During economic uncertainty, individuals tend to invest in gold to preserve wealth for the future,” Koutmos said. “It’s possible this will continue for some time until there’s a resolution [for the economy] in sight.”
In addition, gold speculators are anticipating an increased demand and buying more, which could drive the price up as much as $2,500 an ounce.
“There’s no fever like gold fever,” Koutmos said. “However, we have not reached an [economic] crisis yet, so who knows if this will happen. It could change overnight. It’s very difficult to predict the value of gold. It is very volatile.”
Philip Lane, associate professor of economics, points out that gold has an allure and tangible value to some people because you can feel its weight in your hands.
“Gold is about the only thing going up in value now,” Lane said. “The stock market is bad, so people run to a place they think is safe, which is gold. It’s something you can hold; it feels real.”
Jewelers have seen the inflated price of gold in the late 1970’s into the early ’80s, when the precious metal topped out at around $850 an ounce.
Keeping in mind the volatility of gold, now might be the time to strike and trade in unwanted gold jewelry, jewelers recommend because of the volatility of precious metals. Local jewelers, who have built a reputation in the community, might be the best option to purchase your jewelry at a fair price.
Television commercials have cropped up urging consumers to mail in their gold and they will get a check back. In addition, gold dealers often show up at motels to purchase gold jewelry. But consumer beware, local jewelers warn. Green thinks you’ll get a better price from your local jeweler, who will write a check on the spot.
“We’re happy to have people come in,” Green said. “Local jewelry stores are paying more than the people who pop up in hotels. Many people don’t know what they have. Not only can a watch bracelet be worth a lot, certain brands like Rolex or Cartier are worth more. Your local jeweler will tell you that.
Be aware that the hefty price tag for an ounce of gold is not what you should expect to get. Only pure gold brings the highest price. Most jewelry contains some alloy, which makes it more affordable and resistant to wear and tear.
Jewelers value your jewelry based on a formula that takes into account the purity of your gold that typically ranges from 10 to 24 karat (the purest form).
Most gold jewelry carries a stamp indicating the karat weight of the gold. What’s more, gold fill is not valued the same as a 10-24 karat gold piece.
Shaw urges consumers to consider the sentimental value of a piece of gold jewelry before cashing it in. Family heirlooms often are worth much more than their gold value to consumers.
But if you have some gold jewelry around collecting dust, then it could be the time to catch the fever and cash in on its rising value.
“You don’t have to trade in your engagement ring,” Shaw said. “But many people have gold pieces around that are broken and forgotten. Now is the time to get top dollar for it.”
©Westport Minuteman 2009
Source: www.zwire.com
