Staten Islanders sell jewelry because of high price of gold
Staten Island Advance – SILive.com, NY
by Staten Island Advance
Sunday March 23, 2008, 1:22 PM
The lines aren’t out the door and around the block like they were in 1980 when gold prices skyrocketed, but as the precious metal topped $1,000 there were plenty of Staten Islanders who cashed in.
“We’re not selling to them, they’re selling to us,” joked Joseph Buono, owner of Buono Jewelers on Hylan Boulevard in Grasmere.
Gold has slumped since it hit a historic high of $1,033.90 an ounce a week ago, following a Fed-approved bailout of Bear Stearns by JPMorgan Chase & Co.
But local jewelers say that the steady stream of customers hoping to turn old jewelry into cash, while not yet reaching the frenzied pace of 1980, when gold was up to $850 an ounce, is still brisk.
“We’re scrapping thousands and thousands of dollars worth,” since the price of gold began to rise, said Jimmy Granello, who owns Jimmy’s Fine Jewelry Exchange in Bulls Head and has been in the business 28 years. “But I don’t know that we’ve hit it yet. Back then, the lines were down the block and people were selling everything they had.”
Gold has settled at about $920 an ounce on the New York Mercantile Exchange, after falling as low as $904.70 — its lowest level since Feb. 19. On March 19, gold dropped 5.9 percent, its biggest one-day loss in nearly two years.
“The bottom line is, people are selling stuff, and gold and commodities are getting slaughtered,” said John Reade, analyst with UBS AG in London.
But the price of gold on the market and the price in your dresser drawer differs substantially. The $920 an ounce price reflects “pure” 24-karat gold of the type only found in bars, while most jewelry contains 14 karats. Still, Jimmy’s was offering $440 an ounce for 14-karat gold last week.
Other jewelers reported similar increases in the amount of people selling jewelry for cash, but interest does not appear to have reached a fever pitch yet.
At Jewelry Liquidators at the Showplace Bowling Alley plaza on East Service Road in Travis, business has about doubled in people selling old jewelry due to higher prices. And while some customers at the 10-year-old store simply need the cash, more discerning sellers have been coming in.
“Those people are going to be here no matter what,” sales manager Maureen DeLuca said. “There’s been a lot of older people just getting rid of stuff they’ve had laying around, they say they’ve seen it in the news and they want to take advantage.”
Prices for those interested in buying gold jewelry have risen accordingly, although some dealers ordered stock when prices were lower and haven’t had to boost prices. The real sticker shock will come as jewelers replace their inventory, and will have to charge more.
“We have bracelets that before Christmas were selling for $200 or $300, and when we sold out and ordered new inventory the price was about $200 more,” Buono, said. “But you know what? On Valentine’s Day it was in the $900s, and it didn’t stop the customers.”
Contributed by Phil Helsel. Associated Press material was used in this report.
