People Rush To Sell Gold Jewelry During Rally - Kitco News
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Image Courtesy of House of Kahn Estate Jewelers
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(Kitco News) - With gold at an all-time high in many currencies, jewelers are swamped with customers looking to cash in, said one store owner who reports a 40% uptick in business this summer.
“When we have spikes like this summer, we are very busy with people coming in to sell their jewels because the price of gold has skyrocketed. What people are getting for their jewels now versus a year ago is substantially higher,” House of Kahn Estate Jewelers president Tobina Kahn told Kitco News on Tuesday.
Gold prices began the year below $1,350 an ounce, slowly climbing above $1,350 by the end of May, followed by a rally to $1,400 an ounce in July and then above the $1,500 an ounce in August. At the time of writing, December Comex futures were trading near six-year highs at $1,527.10, up 0.86% on the day.
The surge in prices triggered a business boom for Kahn, who is reporting 40% more customers coming into her stores and trying to sell their gold jewelry versus the same period a year ago. Kahn focuses on estate jewelry and owns two family stores in Palm Beach, Florida, and Chicago, Illinois.
“For the last three years, gold has remained dormant. Now, business is almost double. We are not hearing that people are waiting for a better price. Anything yellow we are seeing,” she said. “We buy and sell estate jewels. I am a gemologist and we test for 14-karat, 18-karat, 22-karat, 24-karat in jewelry format.”
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Image Courtesy of House of Kahn Estate Jewelers
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The gold rally has largely been driven by the U.S.-China trade war, geopolitical tensions, a global shift to central bank easing, and fear of currency wars. Kahn’s customers have expressed similar concerns when bringing in their gold jewelry to sell.
“Customers are very concerned about central banks around the world starting to ease. People also see the country’s debt as a problem and want to be protected,” she said.
“We got two dynamics going on. The older generation is coming in to sell their jewelry because they are on fixed incomes and they don’t want to take risks. Others are looking to make money in a…safer way [rather] than getting involved with the stock market,” Kahn pointed out. “If we get to zero percent interest rates or negative interest rates, we will see people looking at jewels as a way to make money versus getting involved with banks or stocks markets,” she said.
The gold market has seen jewelry become an investment avenue that can finance a certain lifestyle during retirement, president of House of Kahn Estate Jewelers described.
“We had clients that brought in something they bought from us 20 years ago and now they are getting a much higher value for it,” she said. “Jewelry now has become such an investment. What people get for their jewels really depends on the design, the weight of the gold, and any special hallmarks.”
With all the people rushing to sell their gold jewelry, Kahn did not see a drop in sales either, adding that people are really interested in investment-grade items.
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Image Courtesy of House of Kahn Estate Jewelers
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People’s gold jewelry will always increase in value rather than decrease, said Kahn, stating that she goes through hundreds of pieces a day.
When it comes to what type of jewelry to buy, Kahn recommends antique pieces, noting that valuations on them would be better than items at a high-end department store or at an auction gallery.
Kahn does not see business slowing down any time soon. With the Federal Reserve easing on everyone’s minds, Kahn does not rule out higher gold prices in the future.
“I see gold at $1,500 as sustainable and I see that price continuing to go up,” Kahn said. I believe we will have two more rate cuts and I don’t think it will be enough. I am looking for gold to go up to $1,720.”
