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Hernando shops see rush to sell pricey gold

Jessica Rivers of Jewels & Time Pawn Shop in Brooksville inspects a gold ring.

WILL VRAGOVIC | Times

Jessica Rivers of Jewels & Time Pawn Shop in Brooksville inspects a gold ring.

BROOKSVILLE — A woman came into the Nature Coast Goldsmith jewelry store on a recent morning looking to trade some gold items for cash. A breakup with her boyfriend had put some tarnish on those once-cherished gifts.

Not to mention, the price was right.

Later that day, the woman's sister came in with some gold of her own. Still later that day, a friend of the sister brought some precious golden items to the store.

Call it a minor gold rush.

"There's been a huge influx," David Bennett, owner of Nature Coast Goldsmith, said last week. "What we've experienced in the past few months is that people are coming in and needing cash. So they're getting cash for their gold."

The price of gold has climbed to record levels in the past year, eclipsing the $1,000-per-ounce milestone at one point — a first in futures trading. And though the metal stumbled a bit after the Federal Reserve's aggressive interest rate cuts, investors have still found a figurative gold mine in the metal during a time of a lifeless economy, a soft dollar, record oil prices and the housing crisis.

As a result, many owners of gold chains, rings, bracelets, earrings and brooches are following a national trend and trying to cash in at independent jewelry stores, pawnshops and coin shops in Hernando County.

"If you have gold, why not sell it?" asked Micheal George, a gold commodities specialist with the U.S. Geological Survey. "That's why people have gold jewelry. It's an investment."

Gold has traditionally been a safe haven for investors when the dollar is weak. The yellow metal is priced in dollars, strengthening its appeal as an investment for foreign buyers and as insurance against inflation.

That has created a phenomenon many local shop owners say began near the end of 2007 and continued through the winter.

"There are a lot more people coming in," said Todd Rickle, who works at family-owned Gold-N-Pawnd on County Line Road in Spring Hill. "My mother has been selling gold since the 1980s and she said she's never seen anything like this.

"We've got a lot of people calling in, wanting to know what we're paying. They see the price of gold on the news and they've got stuff sitting around that they realize they can sell."

The price someone gets for gold depends largely on the karat level — 24 karat is pure gold — and the amount of the metal. The $1,000 an ounce figure is based on 24-karat metal, so many stores use a sliding scale to determine how much a gold item is actually worth.

"We have no problem telling someone what their gold is worth," said Patti Miller, who works at One of a Kind Jewelry on Spring Hill Drive in Spring Hill. "Most times people come in just wanting to know if their gold is real or not. In my experience, if someone is not sure, then it may not be."

Rickle said Gold-N-Pawnd usually offers about $5 a gram, depending on the quality and quantity of the item. Bennett, whose store is on Forest Oaks Boulevard in Spring Hill, said he was giving customers about $9.40 a gram, which is up from about $6.50 a gram in November 2006.

Bennett recalled one couple who brought gold to sell in December so they could buy Christmas presents.

"What we've experienced in last few months is people coming in and needing cash," Bennett said. "We're still buying gold. That's been a big part of our business. But there's not a whole lot of jewelry being sold."

At some stores, like Florida Diamond and Jewelry Exchange on Commercial Way in Spring Hill, the gold has been stored away and silver has been placed in the display cases.

"I tell people, don't buy gold right now," said Michael Fenster, owner of the store. "You're spending $1,000 for something that could have been bought for $330 three years ago. I stopped selling gold because it's ripping people off." That said, Fenster advised consumers to sell the metal while the price was still high: "Get rid of it. Take the profit and be happy."

Miller said their customers from Hernando County tend to be older and more savvy about tracking the markets, so they're usually focused on getting the best price.

"In our market, they're pretty sharp," Miller said. "They study this sort of stuff. They know what's going on in the world."

George, the commodities specialist, said he couldn't say where the price of gold was heading. He simply advised investors and consumers to use caution. "Gold tends to thrive on world instability," he said. "People are still nervous. Ten years ago, people said gold would never buy at $600 (an ounce). It just proves that people are wrong more often than not."

Joel Anderson can be reached at joelanderson@sptimes.com or 754-6120.

Hernando shops see rush to sell pricey gold 03/30/08 [Last modified: Sunday, March 30, 2008 7:03pm]
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