GOLD RUSH: Exchange rate for gold has doubled since recession
Michele Olson stopped by the Gold-Silver Exchange in Grand Forks on Monday to see how much her friend could get for an old gold necklace. She was quoted a price, decided to see how much she could get for it at a pawn shop and returned a short tim...
Michele Olson stopped by the Gold-Silver Exchange in Grand Forks on Monday to see how much her friend could get for an old gold necklace.
She was quoted a price, decided to see how much she could get for it at a pawn shop and returned a short time later only to find out that the price of gold had gone up while she was gone and the store's offer of $256.31 had already increased by two dollars.
"I couldn't believe it," she said.
Skyrocketing gold prices have led many to look through their jewelry boxes in search of unused items to sell.
Gold prices have more than doubled since the recession began in late 2007.
"It's been pretty hectic around here," said Jerry Breyer, owner of the Gold-Silver Exchange. "Every day for the last three months it's been very busy." Breyer has run the Gold-Silver Exchange at various Grand Forks locations for 29 years. He said he hasn't seen anything quite like the current gold market.
"This is kind of like the California gold rush," he said. "There are a lot of people buying and selling gold."
Breyer's daughter, Jane, who works at the store, said it is sometimes difficult to get to all the waiting customers.
"It's been crazy busy," she said. "At times we have up to five customers waiting in line almost all day."
Jerry Breyer said his business resells gold, silver and other precious metals to a refinery. He said the store is still taking the same commission for gold, but with the increased traffic and higher prices, profits are up.
Gold sold for about $740 an ounce in October 2007. More than a year later it sold for more than $1,000 an ounce for the first time. Gold prices began really shooting up in March and seem to set new records every week. On Monday, gold ended the day at $1,894.70 per ounce, a slight drop from its peak price earlier in the day.
The price of gold was definitely a factor for Brandy Mayes of Grand Forks, who sold some gold and silver pieces for $400 at the Gold-Silver Exchange on Monday.
"I knew that the price of gold was high, so I just brought in some older stuff that I didn't want. Styles change," she said. "It's back to school time, and birthdays all hit at the same time of the year." Mayes said she visited the store for the first time last week to sell a necklace and some earrings and the high prices encouraged her to come back again.
The price of gold stands in contrast to the U.S. stock market. Since recording a record high in October 2007 before the recession hit, the Standard & Poor's index has dropped by about a quarter. Gold has been seen as a safe investment amid turbulent global markets and economies, helping to drive up its value.
The higher prices go, the more consumers will pay for engagement rings at jewelry stores and gold crowns at the dentist's office. Large jewelry chains already raised prices this summer, citing the rising cost of gold and diamonds.
The jump in gold prices has also contributed to a rash of burglaries and jewelry store robberies in some large cities.
Jim Bassett, co-owner of the Silver Dollar Pawn Shop in Grand Forks, said he has noticed an increase in customers bringing in gold items.
"Two years ago gold prices were a lot lower," Bassett said. "When it started getting over $1,000 and $1,200, people starting coming in and selling more. It's been pretty stable since then."
?"Jewelry is always a mainstay of the pawn shop business," he said. "It's easy to carry in and it's not something like a TV that you notice is missing."
The Associated Press contributed to this report.
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