This article ‘Floating on Golden Pawn” was published in the Boston Herald on August 13, 2011. The article was written by Thomas Grillo.
A gold rush has hit the Hub as stock market uncertainty has driven the precious metal to record highs and local pawn shops are seeing steady traffic and paying out higher prices.
“Our business is doing triple the volume on gold buying since prices started their dramatic rise,” said Edward Bean, president of Suffolk Jewelers & Pawn Brokers in the South End and past president of the National Pawn Brokers Association. “We’ve raised our buying price for gold four times in the last month alone.”
Gold prices briefly topped $1,800 per ounce for the first time ever this week as investors — fearing a double-dip recession and a stagnant economy — fled the volatile markets and trusted in the safety of gold.
Tempted by record high gold prices, local pawn shops are seeing a dizzying amount of customers seeking cash for gold. Compared to getting a loan, which requires volumes of paper work, pawning is a breeze. A customer brings in gold coins or jewelry and gets a loan or cash based on the value of the object.
Typically, customers come with plastic bags containing gold bracelets and necklaces, particularly gold rings and earrings, according to pawn shop owners.
Bean said more of his customers, about 25 percent, are selling gold, compared to a few years ago when it was just sold by 10 percent of clients. In the past, he said, customers preferred to borrow money based on the value of the gold, but that’s all changed given gold’s increasing value.
“The big difference is customers are getting more money and there’s no end in sight,” he said. “When gold popped the $1,000- an-ounce price two years ago, people came out of the woodwork to sell and it hasn’t stopped.”
Even though gold prices dipped slightly at the end of the week, Bean said customers keep coming — and prices are still well over $1,700 per ounce.
“If anything we’re seeing more people coming in saying they want to sell,” he said. “People keep hearing that gold has hit an all-time high and they are reacting to that.”
Michael Goldstein, owner of Empire Loan, said when he opened on Washington Street in 1985 gold was about $270 per ounce. But the soaring price of gold, the birth of Cash4Gold, an online company that advertised during the 2009 Super Bowl, and the History Channel’s Pawn Stars, featuring a family-owned business in Las Vegas, have boosted the popularity of pawning, he added.
“Our gold buys are up dramatically and our dollar volume has doubled since last summer,” said Goldstein. “Last July, our total buys were about $45,000. This July we did just over a $100,000 in gold because of the gold craze.”
