“Gold Rush” Raging On, Retailers Say

With the price of gold continuing to set records—$1,370 at press time—retailers say they aren’t seeing any drop in the number of gold trade-ins.

Pat Coughlin of Coughlin Jewelers in St. Clair, Mich., is “amazed” at the business he’s doing. “I really thought we would see the end of it six months ago. I don’t know where these people are coming from,” he says. “And when the media picks up on record-breaking days, like when it broke $1,300, it’s like all of a sudden the bus pulls up.” Agrees Debbie Greene, co-owner of Helms ­Jewelry in Columbia, Tenn., “Anytime there are stories on the news about how gold has gone up, we get a surge.”

Jewelry by Design in Woodbridge, Va., just had its “best summer ever” for gold buying, says owner Jenny Caro—due to heavy advertising and a generous “trade-in” policy (sellers get almost full value for their gold when they use it as a store credit). “I keep thinking at some point we’ll have emptied all the jewelry boxes in Prince William County,” says Caro. “I don’t know when it’s going to end, but I’m going to keep riding it.”

At Wesche Jewelers in Melbourne, Fla., attendance at gold-buying parties—with pirate and cowboy themes—is down, but trade-ins are on pace with past years. “More people are aware of [the price of gold] since it’s on the news,” says owner Holly Wesche Conn. “We’re seeing repeat business—people who have come to events three times.”

Steve Hartz Refining in West Palm Beach, Fla., which refines for a number of independent jewelers and pawnshops, reports that the volume of trade-ins is a little lower, but overall dollar value is higher. “Everybody keeps asking where these people are getting the gold,” says owner Tammie Torner. “I don’t know, but I don’t see any end in sight.” She thinks the business is largely driven by the economy: “People need money right now.” And yet as the gold-buying business has grown more popular, it’s also become more crowded. Many jewelers have noticed stiffer competition, forcing them to up their advertising and sometimes their payouts. “I have seen furniture stores buying gold, pharmacies buying gold—there are huge gold-buying stores all over the place,” says Torner.

The booty at a Wesche pirate-themed party

However, Coughlin believes all the competition has actually been good for local retailers. “You drive around and see all these gold-buying signs, you have gold-buying places in every mall, it gets people interested,” he says. “But most people still want to take it to an independent jeweler, because they trust us more.”

One other positive effect of the rising price: more happy consumers. “With gold at $1,300 an ounce, the average person walks out with a $600 check,” says Coughlin. “They are thrilled. Now they can make the car or house payment.” Wesche Conn gives sellers a chance to guess the dollar amount. Their estimates, she says, are almost always low. “People hold back tears—they are so happy about the money,” she notes. “I had a single mom, and when I told her she was getting $1,100, I thought she was going to pass out.”

With larger paydays looming, retailers hope this modern gold rush won’t slow anytime soon. “People have been buying ­jewelry for decades,” says Joshua Halpern, vice president of Albert’s Diamond ­Jewelers in Schererville, Ind. “I don’t know if it’s possible to buy all the stuff that’s out there in two years.”

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