Richard Rozhko
Paul Beaty  /  AP
Richard Rozhko, owner of Howard Jewelry in Chicago, shows off a selection gold items that customers have sold to him in recent weeks.
updated 3/11/2008 3:45:58 PM ET 2008-03-11T19:45:58

A new kind of gold rush is unfolding at jewelry store and pawn shop counters _ featuring not prospectors, but consumers.

White-collar workers, retirees and many others have been digging through jewelry boxes and safety deposit boxes to cash in as gold prices flirt with $1,000 an ounce. Coins, old wedding rings, necklaces given by ex-boyfriends, hand-me-down gold pieces _ everything is fair game when it brings this kind of profit.

Shop owners across the country are marveling about the phenomenon they say began in the latter part of 2007 and accelerated through the winter, reflecting torrid gold demand like none had ever seen. There are even gold parties, where people gather to sell their jewelry.

"Everybody's trying to sell," said Richard Rozhko, owner of a jewelry store on the northern edge of Chicago. "People are trying to cash out because they don't believe that gold's going to go higher than $1,000 or $1,200" an ounce.

Rachel Weingarten, a New Yorker with a self-described obsession with "shiny trinkets," didn't need to sell but couldn't resist the chance when she saw prices soar like an overinflated tech stock.

"When I saw the prices going through the roof, I saw it as an amazing opportunity to rid myself of jewelry that no longer suits my taste or status," said Weingarten, a marketing consultant. "It's also been a lot of fun to get cash for stuff that is broken or just really ugly or just takes up room in my drawers."

Royal Pawn Shop, a 75-year-old business within earshot of the rattle of passing El trains in Chicago's South Loop, has display cases sporting fancy gold rings, bracelets and watches along with racks holding hundreds of pawned fur coats. It also has more office workers as customers these days _ mostly sellers, not buyers, bringing in gold chains and rings.

"It's stuff that's lying around the house, so they figure: Why not make money from it?" said co-owner Wayne Cohen. "The price of gold is so ridiculously high that they'd be stupid not to get rid of it."

Others are selling to help cope with tough times in an economic slowdown.

Three miles across town, Division Gold store owner John Vela recounted housewives coming in to pawn treasured items from their jewelry boxes and numerous clients saying they need money to pay their property tax bills and take care of other rising financial obligations.

"I have mortgage brokers, real estate agents, retail shop owners. They're nervous, you can see the stress on their faces," he said. "Many haven't been to a pawn shop before _ they want to know how it works. Some don't want to let go of their gold. (But) gold is cash to them."

Silver also is stirring customers to sell more, with prices having more than tripled from $6 per troy ounce two years ago to over $20.

The stories are similar elsewhere.

At Gold Star Pawn Shop in Eastlake, Ohio, where the Cleveland-area economy is suffering, manager Marc Berman said people come in regularly with broken gold chains, rings with marks on them and scrap gold to get more money in their pockets.

"I think it's more about gas prices than anything else," he said. "People are bringing in anything to try to get money to put a few gallons in the tank."

Some seniors come in monthly to pawn gold items in order to make it through until their next Social Security checks arrive, Berman said.

The clientele at Palace Pawnbrokers in downtown San Diego has gone more upscale as gold prices have soared. Owner Jeff Bernard said it's a mixture of those who seem to need the money more than ever and those who want it.

"It's a combination of many factors _ the state of the economy, the price of a gallon of unleaded gas going for $3.60 here," he said. "People are saying 'We've just got to do something.' With gold knocking on the $1,000 door, they can actually pay off a bill, do something significant with it."

One woman recently lugged a safety deposit box full of old wedding rings, chains and gaudy 14-karat jewelry from the 1970s in to Scott Goldstein's Super Pawn shop in Round Lake Beach, Ill. Others have arrived carrying shoeboxes full of jewelry, and a 92-year-old man brought in 80 gold coins. Customers have brought in as much as 40 ounces of gold to sell, he said.

"It's people going through hard times AND the crazy prices," Goldstein said of the crush that began there after Christmas. "With all the foreclosures nowadays, you hear people more and more saying 'I've got a mortgage to pay.'"

Midge Elias watched prices rise for months until she finally gave in to the temptation and walked into a Manhattan coin shop with two mounted Liberty Walking gold pieces she'd once worn on long chains. She left with a check for $1,150.

"It felt like a little gift," Elias said. "Of course, there's always the possibility of gold going way higher. But hey, those are the risks."

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%