Gold Prices Prompt Jewelry Sell-Offs

With the prices of gold flirting with the $1,000 mark, more and more people are starting to look at their old jewelry and see serious dollars signs. The Wall Street Journal's Ann Zimmerman recently went on an odyssey to sell back some of her old jewelry. She found that gold refiners, wholesalers and jewelers have found that more people are wanting to cash out their jewelry lately because of the dual-pronged hit of rising gold prices and a slumping economy. Even some jewelry stores,suffering from economic pressures, are selling their old stock to refiners.

Zimmerman consulted David Firestone, of esteemed Boston jewelers Firestone & Parson, who said she could get at least 90% of the gold's value based on that day's price on the open market. Gold prices are based on 24 karats (pure gold) and most jewelry ranges from 10K to 18K so therefore the jewelry is worth a fraction of the 24K price. Any jeweler or gold dealer will also take a share of the profits so it pays to shop around. Zimmerman found that some jewelers were set to offer her 50% of the total or even less for the pieces.

Pawnshops are doing brisk business lately with many people dropping off their gold jewelry for a quick loan. The loans are often for around three months and most of the property is reclaimed by the owners.

Jewelers are finding that buying gold is suddenly a large part of their business and even stores that would shrink from dealing in gold selling in the past are now eager to take part. People are scavenging their jewelry boxes for stray, outdated and broken items in a way that hasn't really happened since gold's big spike in the mid 1980s.

The hot gold market isn't just luring sellers, buyers, fearing the instability of the stock market and inflation are investing in gold bullion coins. But for the most part jewelers are doing a more brisk business among the sellers, hanging out the "we buy gold" sign and wanting for the eager to roll in, jewelry in hand.