We’re All Gold Bugs Now

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"Not Grandma's necklace!" Photo: iStockphoto

Anyone who has glanced at a financial news source in the last couple weeks — or a Fox News commercial break ever — knows that, while basically everything else is plummeting, gold prices are on their way up. That's a lot of people, many of whom have just decided that "investment piece" is not always just a phrase department-store employees use to trick them into buying another insane pair of shoes.

According to the New York Times, midtown's diamond district — they also do gold! — has seen a major uptick in New Yorkers interested in taking home $1,800 per ounce of whatever they can dig out of their jewelry drawers. (Or those of their passed-out friends — whatever, really.)


“We’ve had a lot more action the past couple weeks,” said a 51-year-old hawker named Al, who wore a “We Buy Gold” sign around his neck and courted customers by showing a piece of paper listing the latest prices for 24-karat and lesser gold. “Business has been good.”

Al would not give his last name (“I got grandkids — I don’t want them to know I do this”) but said he tells customers that gold prices were so high that he was selling rings off his fingers.

“I tell people, ‘I had a ring I bought for $40 back in the day, and I just sold it for $200,’” he said.

And it's not just in New York. Cottage Ca$h-4-Gold operations are the new Tupperware parties:


Amy Robinette, who owns Gold Buying Girl, a network of 70 women in six states who throw parties for people to sell their gold jewelry, says her clients "don't realize how much their gold is worth." She gets a cut of the sales.

"Once they sell, it kind of creates a frenzy," says Robinette, who quit a career as a personnel recruiter to start the business two years ago. "They either want to find more or tell their friends and their friends start selling."

But could any simple-sounding financial decision that so many people are making actually be a good idea? Some say no — but that's only because they're hoping to get more down the line. According to Diamond District worker Denis Garasimov, “A lot of people know what they have, and they’re waiting to see if they can sit on it longer, for a better offer ... It’s a straight-out gamble right now.”

Meanwhile, reports Bloomberg, the citizens of China and India, the world's biggest gold consumers, are keeping their stuff:


“You’re not seeing recycling coming into the market, even with a high gold price, and you’re tending not to see demand drop substantially in jewelry when the price goes up,” said Marcus Grubb of the World Gold council.

They also might be buying yours: This last quarter, "[Gold jewelry] usage in India rose 17 percent to 139.8 tons, and the country and China accounted for 55 percent of global purchases."

A Block Abuzz With the Business of Gold [NYT]
Gold Prices Rise: Welcome To The New American Gold Rush [HuffPo]
Gold Demand Falls 17%: World Gold Council [Bloomberg]

Previously: There’s Gold in Them Thar Downward-Sloping Markets