Jewelry scrapped as gold prices skyrocket
\nMLive.com,\u00c2\u00a0MI
\nby Elizabeth Piet | The Grand Rapids Press
\nThursday March 13, 2008, 7:57 AM<\/p>\n
<\/p>\n
WYOMING — Less than two years ago, every spot in the Wepman Brokers jewelry display was filled with gold earrings, necklaces and bracelets.
\nToday, only the best and flawless pieces make it beneath the glass in the shop at 3710 S. Division Ave. The rest are in a cabinet waiting to be sold for scrap.
\nWith gold prices skyrocketing, Wepman Brokers owner Tonja Wepman has found it’s no longer worth repairing and cleaning gold jewelry for resale.<\/p>\n
Press Photo\/Jon M. BrouwerTonja Wepman, of Wepman Brokers, looks over a gold ring that will be sold for scrap
\nShe can make the money faster — about $20 a gram or $567 an ounce– through scrap.<\/p>\n
“It’s a sure thing,” Wepman said. “I have scrapped some pieces that would almost make you cry.”
\nAntiques, class rings, even dental fillings are a steady source of income in an economy in which fewer people are buying nonessential items, including from pawn shops.<\/p>\n
Depending on the karat compared to pure gold, Wepman profits more from selling scrap metal than she could charge her average customer for the intact piece.<\/p>\n
Gold for April delivery closed Wednesday at $980.50 an ounce on the New York Mercantile Exchange, up $4.50.
\n“It has priced gold right out of the market for my customers,” she said.
\nSo, Wepman extracts gemstones, separates karat types and mails the items off to Kitco in New York, a gold bullion dealer.<\/p>\n
Because the national economy is sluggish, people are reluctant to put money in the financial market, said John Tiemstra, a Calvin College economics professor.<\/p>\n
“In a time of great uncertainty, commodities look very appealing,” he said.
\nWhile high gold prices may increase the cost of jewelry, some electronics and dental items, the average consumer might not notice, said Laurence Blose, a Grand Valley State University associate finance professor who researches the gold industry and prices.<\/p>\n
In response to high prices, mining companies will look to increase production and jewelers might use lower grades of gold or other materials.<\/p>\n
“When prices get very high, there is all this pressure,” Blose said. “There is sort of a regression to the mean.”<\/p>\n
While prices seem high now, it is unclear whether they will return to earlier lows or stabilize, he said.<\/p>\n
“I don’t think you can really predict gold,” Blose said. “People try it all the time.”<\/p>\n
Meanwhile, gold and silver bullion are popular purchases at Diemer’s Coins, Jewelry & Collectibles, 4982 Plainfield Ave. NE in Plainfield Township, owner Dan Diemer said.
\n“People are kind of sick of the stock market and have moved more into coins and tangible incomes,” he said. “It’s the ease of mind if you have it.”<\/p>\n
Diemer has bullion from several countries, including the Austrian Corona, American Eagle, Chinese Panda and Canadian Maple Leaf.<\/p>\n
While he expects gold prices to keep rising, he cautions potential customers to invest only their extra income into metals as a long-term investment or to use in emergencies.
\n“Everything is a roller-coaster,” he said. “Nothing goes up forever.”<\/p>\n
Local jewelers hope the price of gold goes down as it forces up some jewelry prices.<\/p>\n
Record gold prices combined with a weak economy and poor retail environment reduced jewelry demand in the United States by 14 percent last year, according to the World Gold Council.<\/p>\n
“We’re waiting it out a little bit,” said Dennis De-
\nVries, owner of DeVries Jewelry, 411 Leonard St. NW.<\/p>\n
While some prices at the store have been adjusted with the cost of gold, other pieces were purchased months ago at lower costs and will sell at those prices.<\/p>\n
“We haven’t bought a lot,” DeVries said.
\n“We’re waiting to see where gold will level off.”
\nWhile few customers have turned away from gold jewelry, the larger issue of the struggling economy hurts business, DeVries said.
\n“We can’t really blame gold prices for that,” he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
Jewelry scrapped as gold prices skyrocket MLive.com,\u00c2\u00a0MI by Elizabeth Piet | The Grand Rapids Press Thursday March 13, 2008, 7:57 AM WYOMING — Less than two years ago, every spot in the Wepman Brokers jewelry display was filled with gold earrings, necklaces and bracelets. Today, only the best and flawless pieces make it beneath the […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[411],"tags":[],"yoast_head":"\n