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Gold Prices Push Consumers to Sell


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This is todays article in CNN.com Robb.

Gold Prices Push Consumers to Sell
By DAVE CARPENTER 2 days ago

CHICAGO (AP) 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.”