Two trends apparent since earlier this year can be seen on convenience store fuel price boards and jewelry store signs throughout the country.
Jewelry stores are advertising that they are buying back gold from customers and the practice is becoming more and more popular as the price of gold inflates, the value of the dollar drops and the price of fuel climbs.
Starr Bragg, owner of Bristol and Bragg Jewelers in Maryville said jewelry stores have always bought gold but now it’s more popular because the price of gold is two and half to three times what they’ve been able to pay for it. “The price of gold is between $800 and $900 now and has been up to $1,000 per ounce,” she said.
Darrell Downey, owner of Fairview Jewelers said with the economy being so soft, people are not buying as much jewelry, so jewelers are getting more aggressive toward buying it. “We’re selling it to refiners who make it back to pure and sell it back to manufacturers,” he said.
Downey said recycling is the best way to describe what happens to the gold. “You don’t want to use used gold to manufacture merchandise,” he said. “Everything has to be recycled back to pure gold and recast.”
Maryville Jewelers owner Tim James said some stores buy back gold more than others. Usually the gold that is melted down is recast for items like catches and jump rings jewelers use to repair products.
James said that more people have been asking to sell back gold jewelry because of publicity related to how high the value of gold has climbed. “People start thinking about it and hear it’s worth more,” he said.
James said a lot of what people are selling back isn’t new merchandise but rather older pieces like herringbone necklaces and yellow gold, things people aren’t wearing anymore. “They think if they’re going to get rid of it they sell it when it’s high,” he said.
Bragg said the trend started at the end of 2007 and beginning of this year. “It started right after the first of the year when gold started to rise,” she said. “When gas started to go up, people need an alternative to pay to put gas in their car and to heat their homes.”
James said once gold values started moving and broke $800 an ounce, everybody took notice. “You started to see it on CNN,” he said. “That was about the time gas (prices) started moving.”
Downey said once gasoline prices started climbing, a lot of people realized they had some selection of gold that was either broken or they hadn’t worn in several years. “It’s no big secret it’s tough to pull up to the gas pumps,” he said.
Bragg said the trend of stores advertising to buy gold is definitely tied to the economy. “It’s my understanding people overseas aren’t investing in the dollar anymore, they’re investing in gold,” she said. “It’s more desirable and higher priced because of that desire.”
James said generally the value of gold would go up, as the dollar gets weaker. “It’s not really hooked to gas but it’s all same,” he said. “As the U.S. economy slows down, the U.S. dollar is worth less and it inflates the price of gold.”
Downey said the practice of buying gold back from customers helps in two ways. “It’s putting money both in the consumers’ hands to where they can buy fuel or clothing or groceries and when we sell it to refiners, it’s putting money into jewelers’ hands so we can pay rent and salaries,” he said.
The practice of selling gold back is definitely affecting the economy. “It’s got to help the economy a little bit,” he said. “Unfortunately we have all these high prices but it’s one way we can support and open our businesses everyday.”
Bragg said mainly what she and her staff sees is broken jewelry, earrings or items the customers aren’t going to wear again. “A lot of people are cleaning out their parents’ jewelry boxes or their inherited jewelry and things like that,” she said. “Gold coins and things like that are popular.”
Bragg said she and her staff didn’t immediately start advertising that they were buying back jewelry when gold value started climbing in January. “We watched the trend and first started talk about buying it in March when we saw the demand was there,” she said.
James said that while his store has always bought gold when customers wanted to sell it, when other stores started advertising that they were buying gold, he and his staff wanted to be able to serve their customers. “You don’t ever want your customer to go to a competitor, whether they’re buying or selling gold or jewelry,” he said. “We try to steer them in the right direction. We try to guide them and tell them how to sell it and actually get them fair value.”
All three jewelers said clients have brought them some unusual gold pieces. “I think we’ve seen some unique pieces and we’ve seen some 18 karat gold that you could tell was not bought in America but the Middle East because it has a higher content of gold,” she said. “In the Middle East they have 20 and 22 karat gold.”
James said some people have pawned dental work. “Some people are selling teeth - gold teeth,” he said. “That’s probably the most unusual gold item we get.”
Downey said the most unusual item his staff has seen sold back was an 18-karat gold pocket watch with a hand-painted cameo. “I think the engraved date was 1864,” he said. “It was a wedding gift to someone. It’s key-wound.”
Bragg said most people have to go to a jewelry store to sell their gold because many people can’t afford to pay the refiner’s fee. “We have to accumulate a certain amount of gold to make it worth the refining fee,” she said. “A good batch to send to the refinery is around 500 grams.”
Bragg said she’s also noticing that people are selling their old jewelry simply because they want to wear new styles of jewelry. “I’ve been in the business 20 some odd years and never seen people wanting to sell jewelry and now people are wanting to buy stylish gold jewelry,” she said. “People are wanting to show a new style of gold and so they’re selling their old jewelry. It’s a trend definitely across the country.”