Gold fever strikes region

High price draws sellers to market

Friday, July 17, 2009

Click here to enlarge this photo Staff photo by GRETCHEN PHILLIPS Jennifer Stevens, a buyer with Genuine Gold LLC, talks with Lisa Johnson of Accokeek on Friday at the Holiday Inn in Waldorf. Johnson, like many participants, had several gold pieces to sell including watches and necklaces. E-Mail This Article | Print This Story

More customers showed up to a recent "cash for gold" event at a Waldorf hotel than could fit in the room.

Some lined up outside; one couple enjoyed a carryout lunch while waiting.

Gene Gilbert, managing partner of Genuine Gold LLC, said in a telephone interview that the turnout at the Holiday Inn on July 10 was typical.

"We're busy every week," he said.

The company trades via hotel shows in Maryland, Virginia and Pennsylvania and operates a mail-in appraisal and buying service via the Internet. He stressed that the company has a high rating with the Better Business Bureau (www.bbb.org/greater-maryland/business-reviews/jewelry-buyers/genuine-gold-in-owings-mills-md-90103398).

"We're a straight-and-level company to do business with. We do business right. We have a good reputation," Gilbert said. "For that reason, our customers are happy."

The company has been in business during most of the economic slump, and trade has been steady.

"The only thing that kind of surprised me is people are — we're as busy now as we were a year ago. It's a sign of the times, [that] whatever people see on TV about things getting better, people are looking for whatever legitimate source of income they can," he said.

But customers said they were lured by an opportunity to make money, not driven by money troubles.

Joey Moseng of White Plains held out a small box of broken gold chains and said she would "probably go shopping" with the money she expected to earn.

Lisa Johnson of Accokeek said she came "to try to make money off gold I don't use. Most of it is broken."

The global price of gold is its highest in at least 36 years, according to press reports and goldprice.org, a Web site tracking precious metals markets, and advertisements for gold buying have sprouted up in newspapers, on television and on roadside signs.

Consumers might find now to be an opportune time to convert jewelry into money, and can shop around to find the highest price.

Rayner Blair, owner of Blair's Jewelry and Gifts, doesn't advertise it, but like many jewelers he will buy gold from customers.

"People come in and sell old gold. I don't feel it's people that are in dire straits of money at all. It's people that are coming in that have items they haven't worn in years. Broken items, mismatched earrings," he said.

He strongly recommends that those with gold to sell head to a jeweler, and that they, above all, avoid mailing gold in for appraisal by large companies. He once tried doing business with one of those companies just to examine the competition, he said, with disappointing results.

"We sent off some gold, $500 worth, and I guess it was a week later we got a check for $150. So I called them and I said, ‘There must be a mistake here. I sent more than that.' So a few days later they sent another check for $150," Blair said. "The long and short of the deal is, what we found is when you cash the check you've made the deal. If you call and complain they'll send you a little more money and they'll continue to send checks until you take it. … I just wanted to see what they were doing and my hunch was pretty right."

Randy Heim, owner of Golden Renaissance Jewelers in Waldorf, said he recently returned to the business of buying scrap gold reluctantly, concerned it could bring unsavory people into his store. But there have been no problems. A desire to take advantage of high gold prices, rather than any desperation, seems to have motivated customers to sell old jewelry. A herd mentality might also play a role, he said.

"Again, it's like any other fad or fashion that tends to be a flash in the pan," Heim said. "You would expect, once word of mouth gets around, a lot of people jump on board. And then when people find it's advantageous to sell things that they're not using, things that are broken, the next-door neighbor finds out, gold parties happen and you start seeing all the advertisement. … If people say, ‘I want to buy tree twigs and I'm willing to pay "x" number of dollars for them,' people are going to jump on it when they find they can make money at it."

Getting back into the scrap gold business has also helped Heim in an unexpected way, by helping him spot jewelry fashion trends. Most of the gold brought in for sale is yellow, signaling that white gold is gaining popularity, he said.

He sells what he purchases to a refinery, a necessary step because most of what comes in was manufactured before federal standards for gold purity were tightened in the 1980s, Heim said.

Barbara Sowell, office administrator for Dickinson Jewelers in Dunkirk, said the business has seen a spike in gold sales that she attributes to the economy. Dickinson locations also sell the gold to a refinery.

Clients are bringing in "gold broken chains, rings they don't wear as much, basically jewelry not worn as often," Sowell said.

"… People think, ‘It's laying around, why don't I get money for it?'"

But jewelers and shows aren't the only way to sell old jewelry.

Dennis Cohen, owner of All Pawn in White Plains, buys gold and other jewelry and said he is careful to provide a fair price.

He said that by doing business locally rather than with big businesses, customers are likely to leave with more cash in their pockets, as well as support the Southern Maryland economy.

"I do know from talking to friends and people I know that have gone up and participated in [shows] that they do not get as much money for their gold as I pay out. The other thing is, you have companies come in, they buy up all the gold they can get their hands on and then they leave," Cohen said. "None of the money stays local."

emitrano@somdnews.com