In a Modern Gold Rush, Can Memories Beat $913 an Ounce? By MICHAEL BARBARO
Published: April 5, 2008
Gold rushes should be simple money-making schemes.
And on the surface, this one is. With prices hitting record
levels, people are melting down rare coins. They are digging
through drawers for family heirlooms to pawn. And they are
giving gold parties, inviting friends to walk in with gold
and walk out with cash.
Gold is coming out of the walls, said Joseph
Grunberg, a pawnbroker and jewelry shop owner in the Diamond
District of Manhattan.
He said his clientele is the rich and not-so a stockbroker
came into his store recently to sell his $30,000 gold watch,
but hes also seen people hoping that their old class
ring might help pay the rent. Its a mega-mega
business right now, he added.
But there are hidden costs to cashing in. As thousands of
Americans rush to sell off pieces of their past an
ounce of gold now commands about $913, as of Friday afternoon,
up about $240 from a year ago they are confronting
treacherous emotional terrain.
Behind every 18-karat gold herringbone necklace and 12-karat
toggle bracelet is the story of a bad breakup or a late great-aunt.
That has turned the seemingly uncomplicated process of cashing
in on golds surging value into an emotionally fraught
experience, bringing new meaning to the notion of a precious
People tear up as they tell us about the jewelry,
said Michael Mouret, president of Louisiana Gold & Coins
in Baton Rouge, who, like many storekeepers, has become a
therapist for conflicted gold sellers.
A tough economy across much of the country is pitting memories
against much-needed money. Rita Wallace, 50, has collected
coins for 30 years, a hobby she inherited from her grandfather.
Selling the coins as scrap gold, destined for melting, was
never her intention.
But after watching the price of gold soar this winter, Ms.
Wallace, who is unemployed, decided to send off for melting
her United States Mint coins commemorating the Statue of Liberty,
the Constitution and the founding of the Jamestown colony
In the end, she was paid $5,000, far more than the coins
value as collectibles, she said. Is it really what I
wanted to do? said Ms. Wallace, who lives outside Columbus,
Ohio. No, not really. But it made the most sense financially.
Golds steady climb in price has been driven by a swooning
stock market, a weak dollar and fear of inflation, which have
prodded people to turn to safer bets, like ever-reliable gold.
Its value jumped from around $660 an ounce a year ago to more
than $1,000 in March.
Prices have slipped back to about $900, but the numbers are
still attractive enough to drive thousands of Americans to
raid their jewelry boxes.
To mitigate the emotional toll, a handful of pawnshops and
jewelers are playing host to gold parties, where a combination
of alcohol, food and banter has transformed a cold financial
transaction into something resembling happy hour.
At one such party a few nights ago, with a 28-year-old teacher
in Shelby, Mich., as host, a group of women drank wine and
snacked on vegetables as a jewelry expert calculated the weight
and karat value of their gold, writing them checks based on
that days gold price ($880 an ounce).
Raegen Findlay, a 29-year-old homemaker, arrived with several
dozen pieces of jewelry, some hers, some belonging to her
mother. As it was examined, Ms. Findlay panicked, picked up
her cellphone and called her mother. Did she want to salvage
the gems from a gold ring before it was sold off and melted
Nah, she said to go ahead and sell it all, Ms.
Findlay said, relaying the conversation with her mother, who
wanted the extra money for a coming vacation. The gold from
Ms. Findlays mother was worth $365 a figure that
drew applause from the women in the room.
While wrenching for some, selling gold is cathartic for others.
Over the last few months, a woman named Diane, who lives in
Tennessee and asked that her last name not be used, has sold
more than $1,000 worth of gold jewelry given to her by her
former husband, including a 14-karat herringbone necklace
(sold for $500).
If I had not gotten a divorce, I probably would not
have parted with it, she said. But I did not need
that kind of karma lying around the house.
Stanley Crane, a 66-year-old coin and jewelry collector,
said the high price of gold was the equivalent of a get-out-of-jail-free
card for those who are stuck with, say, an 18-karat wedding
band saddled with emotional baggage from a breakup, or a chunky
gold charm bracelet that has fallen out of fashion.
It forgives a lot of bad stuff and makes up for a lot
of mistakes, he said.
Mistakes like damaged coins. For years, Mr. Crane, a retired
trucking company employee in White Lake, Mich., has tried
to unload dented and scratched coins that have languished
in his collection for lack of a buyer.
When gold prices began to surge this winter, the weight of
the flawed coins overshadowed any aesthetic flaws. He just
traded an imperfect gold coin worth $936, at the time, for
two smaller gold coins, potentially worth much more because
they are in mint condition.
Not everyones story ends that happily, or profitably.
Many are discovering, much to their embarrassment, that all
that glitters in the back corner of their jewelry box is not
gold or at least not the valuable kind.
Several weeks ago, a 30-something woman walked into Lombard
Mutual, the pawnbroker and jewelry shop in Manhattan, to find
out how much a pair of gold drop earrings might fetch.
Behind the counter, the shops owner, Joseph Grunberg,
performed a routine test and delivered his verdict: Gold
plated, he said.
Im shocked, responded the woman, who would
identify herself only as Jessica because of what she said
next. It figures. My boss gave me those earrings right
before she fired me.
She claimed, Jessica added, with disgust, that
they were real gold.
Mary Chapman contributed reporting from Shelby, Mich.