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Soaring gold prices make it a great time to cash in

They stream in with their wrinkled paper bags, dusty Crown Royal tote sacks and hopeful expressions. The person behind the counter smiles and slips on the Optivisor magnifying glasses.

Out tumble the rings, coins, bracelets, necklaces and watches.

The 2008 gold rush is on.

Customers stood two deep at the counter at David Reynolds Jewelers on Tuesday to cash in on gold, which by 11 a.m. had reached the historic price of $1,003 per ounce.

By Wednesday, the price fell back to about $945 an ounce — a reflection for now of the Federal Reserve's aggressive actions this week to stabilize the economy. But gold is still far above $873, which it reached on Jan. 21, 1980, and which stood as a record for almost 28 years. Since 2001, the prices of gold, silver and platinum have risen an average of 265 percent.

So why is gold golden? Three reasons are most often cited: a growing demand from emerging markets, the steadily weakening dollar, and the belief that gold, as well as other commodities such as copper, soybeans and oil, provide a safe haven from the volatility in the financial markets.

All of that translates to a necklace that's now worth three or four times what it was just seven years ago.

"We're at least twice as busy as usual," said David Reynolds co-owner Ron Spivack. "One woman cleaned out her jewelry box, and 20 minutes after she left, three of her friends came in. She had called them all."

Before the rush, Spivack said people were sometimes sad to sell their jewelry. The money they got often went to pay an electric bill, make a car payment or buy groceries. "But not so much now," he said. "This is more about cashing in."

And it's not just a seller's market. Worried that the stock market and the dollar are not safe investments, many people are also buying gold and silver.

"Of course," said co-owner Earl Waters, "they're horrified at the price. But they have no faith in the currency. They feel it's a safer bet."

But most of the customers were like Charyl Gargel, who came in with a necklace and a bracelet. "I never wore them and never liked the look of them," she said. "They've just been sitting around. Then I looked at the price of gold.

"I'm a real estate agent, and the market is terrible. So I thought this is a good time to get rid of them."

It was. Gargel paid $100 for both pieces 10 years ago. She walked away with $360.

Bill Deaton, co-owner of the Gold Mine in Tampa, said the number of sellers he sees has slowed a little in the last week.

"Unfortunately, when you're talking about $1,000 an ounce, it's usually not explained that that's for pure, 24-karat gold," Deaton said. "People are getting the wrong idea. The majority of gold out there is 10-, 14- or 18-karat."

And for gold of that purity, owners could get less than half the full price. Add in a 10- to 20-percent profit for the business owner, and $1,000 an ounce can quickly become $400 an ounce or less.

"But it's still a good deal," Deaton said. "People are usually getting a lot more than they originally paid."

Tom Zucco can be reached at or

(727) 893-8247.

What's your gold worth?

Karat (purity)% gold
18 75
24100 (pure)

*old U.S. gold coins

Get at least two appraisals. Ask how much the retailer charges. Most gold jewelry is stamped with a karat number, but a simple acid test reveals the quality.

Soaring gold prices make it a great time to cash in 03/19/08 [Last modified: Thursday, March 20, 2008 9:44am]
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