Gold Rush – Is Your Fortune Sitting In Your Jewelry Box?

By Refoel Pride. With the international economy in shambles, governments and banks are buying gold in an attempt to stabilize their financial footing, driving the price of gold to an unprecedented high. So where does that leave all the old earrings, cuff links and other golden pieces you haven’t worn in years? Is your fortune sitting in your jewelry box?  

If you read community circulars, mailbox flyers, and local bulletins you probably can’t help noticing advertisements for selling your gold, promising quick cash for those old earrings sitting at the bottom of the jewelry box, the ancient cuff links, or the out-of-style kallah necklace. Is it just coincidence, or is there really a rush on the gold market?

“As my husband says, ‘Gold stays gold. Gold always maintains its value. It has a value as soon as it comes out of the ground. It’s not the value of gold that fluctuates; it’s the value of money that fluctuates,’” says Mrs. Judy Goldring, proprietor of J. Goldring Jewellers in Boro Park (and yes, that’s her real name). “And unfortunately, the dollar, the euro, and all the currencies are doing poorly against the value of gold right now.”

The skyrocketing price of gold — or, to stick with Mrs. Goldring’s viewpoint, the US dollar’s terrible performance against the value of gold — has driven a stampede on the precious commodity. As always, in times of stormy economic seas, people seek safe harbors for their financial assets. And gold has consistently offered the promise of lasting value.

And when dealers want gold, they’re willing to pay for it.

Mrs. Goldring’s store, in addition to supplying the tri-state community’s jewelry needs, also buys jewelry from customers looking to sell. “People bring us old pieces, pieces that are out of style. When people sell us their gold, they are getting the scrap value — that is, the weight of the gold in the piece. Often they decide to treat themselves to something new — that’s what we’re hoping they’ll do, and of course, that’s one reason we are providing the service.”

 “My mother-in-law bought me a gold bracelet ten years ago for $350,” recounts Sarah F. of Beitar, Israel. “I’m certainly not a gold speculator, but the bracelet broke and couldn’t be fixed, so I sold it, and what a shock — $600. Now, it sounds like the value of it doubled — but they only give you half the sale price, so it means the value actually quadrupled.”

Today gold weighs in at over $1,700 per ounce, compared with around $300 in 2001 and $1,200 just last year. Some people might hear where the price of gold is holding and rush to weigh their grandfather’s cuff links on the kitchen scale. Two ounces, with gold holding at, say, $1,750 — that means Zeidy’s cuff links will net around $3,500, right? Not so fast, cautions Hershel Gerstel, owner and operator of the Harold the Jewellery Buyer store of Toronto.

“The price of gold you hear quoted in the news is the price of pure gold,” he explains. “Most of the gold people hold is not 100 percent pure; it’s usually 14 carats, which is 58.5 percent pure. But when you go to sell it, you’re not going to get 58.5 percent of the value of the weight in gold either, because the guy buying it from you has to make money off the deal. You’ll be lucky to get 50 percent — that’s doing well.”

What does the gold buyer do with all that old jewelry he’s purchased?

“Everything gets recycled,” Mr. Gerstel says. “All the scrap — the old jewelry — gets sent to a refinery. They melt it down and transform it into pure gold. The refinery turns around and buys the gold from me and then sells it to the banks. One ounce today is around $1,750. The main branches of all the banks treat pure gold the same as cash — it’s an international currency. However, you have to bring it to one of the main branches; the smaller satellite branches aren’t equipped to tell if it’s real.”

If, after reading this far, you’ve already started rummaging through the jewelry box looking for pieces to sell — wait. The gold buyers have some advice.

“Don’t sell something that has sentimental value,” counsels Mrs. Debbie Grunberger, whose husband is Shalom Grunberger of Gilad Diamonds, established in 1954 by his father, Baruch Grunberger z”l. “You might find that your grandmother’s ring is ugly — but you can give it to the daughter she’s named after. Of course if people are selling jewelry because they need the cash — that’s different. I can’t make that cheshbon for them.”

Hershel Gerstel agrees. “People have this sentimental attachment to pieces that they’ve had for 20 or 30 years — but they shouldn’t think it’s some kind of investment,” he muses. “They don’t realize it’s a commodity like anything else. It’s not an investment. A pure gold bar, that’s an investment. Jewelry is not an investment.

“The minute you buy a piece of jewelry, you lose money,” he points out. “Let’s say you buy at $1,000; at best you’ll get back $500. It’s not like with buying a car; as soon as you drive it off the lot, the value drops 20 percent, and then a little more each month. With jewelry, it’s an instant depreciation. People should not think that they should hold onto it as an investment.”

Mr. Gerstel offers his own perspective on what should motivate a person to sell family jewelry. His views have been formed by his 30 years as a buyer himself.

“People shouldn’t be selling jewelry because they need money,” he advises. “You should be selling jewelry for the same reason you sell an old car. It’s a style-based question. Most gold jewelry people have is out of style, and it’s unknown if it’ll ever come back into style. Gold watches, for example, today are considered out of style.”

So why are the people coming to him selling their jewelry?

“People sell for all sorts of different reasons,” he admits. “Some people need the money, some people don’t. A lot of older people come here who don’t need the money, but they’re putting their affairs in order and settling their estates.” [Read more in this week’s Mishpacha Magazine].

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  1. Having worked in jewelry I tell you this from experience. The percentage of gold buyers that rip you off is only just under the amount of dishonest collectible dealers! Be VERY VERY carefull before you sell your gold. Don’t just agree to any price your offered. Its common for gold buyers to offer you just %50 of your gold value. Before you sell your jewelry have it weighed by someone you trust and find out the exact market value of the gold. Only then should you bring your gold to a store to buy. You can then see what percent of the market value you are trully getting.

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