AP: Tough times drive people to cash in their old gold
Linda D'Amato slid a gold peso toward Joe Candella, who quickly but carefully eyed the money as he placed it on the scale. The coin, which D'Amato inherited from her grandmother, weighed in at 1.2 ounces. Candella told the Colchester resident Wednesday that he would pay her 95 percent of the price of gold - nearly $850.
D'Amato said thanks but no thanks and took back her coin and other gold jewelry.
She is just one of many who have recently visited Connecticut Gold Buyers LLC on South Colony Road in Wallingford. She wants to sell her gold for the same reason as many others mentioned as they collected their cash, Candella said.
D'Amato is looking to sell it to have more spending money for Christmas. More people are trying to sell gold that has lost its meaning, or is out of style, likely because of the tough economy, he said.
People are looking through possessions and selling personal items to make ends meet, agreed Jerry Farrell Jr., commissioner of the state Department of Consumer Protection.
With the price of gold being higher in recent months than in the past, financial experts say it may not be a bad time to sell items made of the precious metal, but they warn that prices may climb higher in the future. Unless someone needs the money immediately, it might be wise to wait to sell, said James McManus, a consultant for Raymond James Financial Services Inc. in Wallingford. The price will go up if there is inflation and if there is a weak dollar.
"It's a matter of perspective," said Thomas Coe, chairman of the finance department at Quinnipiac University.
On Thursday, the price of gold was $746 per ounce. It reached $1,023.50 in March, a record high.
The person selling a piece of gold walks away with cash. At Connecticut Gold Buyers, people often get between 60 percent and 70 percent of the price of gold, Candella said. At Meriden Pawn LLC, owner Gennaro Martorelli says his customers do not get the market price, but rather get a "fair price" that is determined after the item is weighed and undergoes an acid test.
People looking to sell their gold rings or necklaces should educate themselves, Farrell advised, suggesting that those looking to sell visit a number of stores to determine where they can get the most for their items.
"You have to look carefully and know the value (of your jewelry)," Farrell said.
As a buyer, Candella agrees, saying that those selling gold should weigh their item themselves and research the price of gold before trying to sell anything.
"If you don't know what you have, you're not going to get the right money," he said.
With gold up and the economy down, Richard Maloney, director of trade practices for the Department of Consumer Protection, said there has been a recent uptake in pawn shop complaints, and he encourages people who feel they have been misrepresented to file a complaint with his office. The Department of Consumer Protection will investigate, he said.
The more complaints a business receives, the more attention it will get from the state, Farrell added.
"We try to look for patterns, but every complaint will get some kind of attention," he said.
As with both Candella and Martorelli, buyers of gold often melt the metal to make gold bars. They then try to resell the gold, hoping to make a decent profit. Candella sells his gold bars to manufacturers that use the material to make more jewelry. Stores such as Connecticut Gold Buyers purchase gold at wholesale prices and hope to get retail prices when they resell the item, Coe said.
People can invest in gold, which does well during times of recession, McManus said, adding that gold is included in many of the portfolios he prepares.
"We are talking about gold bullion," he said. "It's real money."
And the real money does well in difficult economic times, because it is a hard asset that is somewhat stable, Coe said.
