Gold glistens most brilliantly when the economic clouds tarnish and turn into that dull color of dread.
This summer, gold prices soared on fears that the coronavirus pandemic would continue to cast a dark shadow on jobs and economic growth. As the dollar fell on those fears, gold prices shot up.
Gold broke new records in late July and soared above $2,000 an ounce after a nearly two-year bull run. Gold hit a record around $2,070 an ounce Aug. 6.
Gold has pulled back a little, but it’s still incredibly high, trading at around $1,945 on Friday.
When the price of gold – and economic woes – heat up, consumers start to look twice as they drive by signs that say, “We buy your gold.” Some might think, maybe I should unload my husband’s wedding band.
I’ve written columns about the “sell your gold” frenzies. Each time, I priced my husband’s wedding band to use as a standard measure to comparison shop.
So last week, I turned to my husband once again and said: “I’m going to need your wedding band.” (We will celebrate our 25th wedding anniversary in a few months, so I had no intention of really selling his ring.)
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Each time, the exercise proved the same point. You don’t always get the same quote on the same day if you take time to drive to a few stores.
Another key constant: You’re not going to make big money unloading a ring or a few earrings that lost their mates. Remember, you’re going to get what’s closer to a “scrap” price for gold, which is nowhere near $1,900 or $2,000 an ounce. That big number applies to pure gold, and 14-karat is 58.5% pure.
What you should know about selling gold
In their lifetimes, more people will sell a couple of used cars than unload gold jewelry. So it’s key to take time to understand the process to get your best price as you hear more about record gold prices.
Some tips include:
- Know the current market price. Call stores to get quotes. Use oldprice.org as a guide.
- The higher the karat, the more gold content. Different karats – say, 14 karat and 10 karat – should be weighed separately and priced accordingly.
- Find a trusted appraiser for special jewelry.
- Ask whether there is a charge for removing the diamonds or stones.
- Be cautious when someone promotes the “best price” on gold. You still might need to negotiate.
- States have different rules for dealers. The Michigan Precious Metal and Gem Dealer Act requires precious metal dealers to register with the local government or local police agency where they intend to do business. Precious metal dealers must keep a permanent record of each transaction, and must keep all precious items received for nine calendar days. The idea is to make sure the item isn’t stolen. A driver’s license or identification is required to sell gold.
How much can you get for a wedding band?
In 2008, I wrote that we could have picked up about $73 to sell off my husband’s 14 karat gold wedding band. Just three short years later, the wedding band jumped in value, according to one quote, to around $207 in 2011.
Gold was trading at about $925 a troy ounce in August 2008 when I wrote a column on the rush to sell all those class rings; it shot up to around $1,700 an ounce when I wrote another column in August 2011.
And last Friday when gold was around $1,950?
I was quoted $105 to sell my husband’s wedding ring at the American Jewelry and Loan Store in Hazel Park, Michigan. The very nice clerk asked me how much money I needed when I looked disappointed, and suggested that she’d be able to value the ring at $150 if I wanted to pawn it instead. She added that she thought I should not sell the ring since gold is the only asset we have and you never know when you’ll need a loan if you blow a tire.
I was quoted $155 at Tapper’s Diamonds and Fine Jewelry in Troy. (There, I had to pull down my protective COVID-19 mask as I entered the store so the security camera could see my face.)
And I was quoted around $230 for the ring at Astrein’s Creative Jewelers in downtown Birmingham when I asked one of the owners for a quote.
Why are some selling gold?
At Astrein’s, I met Sean LePine, 21, of Beverly Hills, who was selling his grandfather’s 10 karat gold pinky ring with diamond chips for $157.
“I just had it in my drawer,” LePine said.
LePine’s mother had gotten an email from Astrein’s about how the store was buying gold. LePine’s grandfather, who died in 2008, had collected jewelry. The family didn’t have any emotional attachment to the ring, which the grandfather wore in the 1990s.
The grandson, who works at a Guido’s Premium Pizza franchise in Auburn Hills owned by family members, figured he could use spending money for things like gas and food.
“Everybody can use a little extra money right now,” said Gary Astrein, one of the owners of Astrein’s Creative Jewelers.
“A lot of it’s broken jewelry,” Astrein said. Or tired pieces, old gold chains, old gold rings.
Many times, he said, the sellers are older customers who wore something for a long time and now realize it’s OK to sell it.
“Their kids don’t want it,” he said. “They’re not going out wearing it.
“We write a check on the spot.”
Some people are selling a lot more than an old ring, as Astrein says he’s written checks for $4,000 or $5,000.
He showed me a Wayne State University class ring from 1962 that he paid $306 for the other day. It’s a 10 karat man’s ring, which is fairly heavy.
He showed me what I thought was an attractive gold bracelet that a seller got around $1,000 for recently.
“It doesn’t appeal to anybody under 40,” he said, “and anybody over 40 is trying to sell it.”
A heavy gold necklace – statement jewelry for well-dressed women in the ’90s – recently brought a seller $2,200.
Gold prices will fluctuate daily. So what looks like a good deal one day could turn better – or worse – the next.
On Friday, Astrein told me he was buying 14 karat gold at around $29 to $30 a gram. There are 31.1 grams in a troy ounce of gold. You’d get more money for 18 karat gold, less for 10 karat gold.
So is there a new gold rush?
Yet even at these higher prices, gold fever isn’t spreading all across town. You’ll spot a few local ads on TV for Tapper’s Gold Exchange. You’ll spot a few signs as you drive around. But something seems a bit different than in the past as the COVID-19 recession unfolds.
Hear of anyone throwing a “gold party” lately where you can visit a friend’s home to sell gold? Not exactly something many want to try in a virus-fearful world of physical distancing.
Detroit’s American Jewelry and Loan, where the hardcore deals turned into reality TV, isn’t seeing a gold selling frenzy anything close to what the store saw in 2011.
Instead, the stimulus checks sent this spring and summer proved to be a lifeline early in the recession and cut into the pawn business in Detroit and across the country, said Les Gold, owner of American Jewelry and Loan, which also has stores in Pontiac and Hazel Park.
The first round of stimulus payments covered a great deal of bills and then some. Yet more people could find themselves hungry for cash if a second round of stimulus isn’t in the works.
People who were flush with their stimulus cash – up to $2,400 for a married couple and $500 for each qualifying child – were coming into the pawn shops to get their TVs, jewelry and other merchandise out of pawn. And they were buying items that the store has for sale, as retailers saw checks getting spent too.
Gold said the stimulus checks created the kind of retail sales that one often sees at tax refund time in February or March.
“This was that time again on steroids,” Gold said.
Many people, he said, typically weren’t pawning more items or trying to sell off their gold jewelry in spring or early summer once the checks rolled out.
“People really didn’t need the money,” Gold said.
Lately, he said, the pawn business has picked up some after much of that stimulus money has been spent. If another stimulus program isn’t approved by Congress, Gold said, he would expect the pawn business to pick up in the months ahead.
The pawn business had seen an uptick in March, soon after restaurants and other businesses closed down in the fight against the virus, according to American Jewelry and Loan. But that was before the stimulus checks got into the hands of consumers.
“We’re street-level economists,” concluded Gold, the star of TV’s “Hardcore Pawn.”
Even so, Gold said he doesn’t expect to see many of his customers selling their precious metal. Too many lower- and middle-income families sold their gold in 2011, he said, so they don’t have much left to sell now.
And someone who bought a gold ring or necklace in recent years might not want to get rid of it yet, Gold said, because it would cost significantly more to buy another piece of gold jewelry to replace it, given the 30% run up in gold prices in the past year.
A man who bought a gold chain for $1,000 five years ago, he said, could pay $1,800 for that same chain.
Gold argues that it’s better to pawn it. The rate on the 90-day loan is 3% each month, plus a storage fee of $3 per month. If the loan isn’t paid off, it does not go against one’s credit score because it’s viewed as a non-recourse loan.
“Why lose that piece that they love?” Gold asked.
This article originally appeared on Detroit Free Press: Gold prices sky high but no jackpot if you’re selling a wedding band