High gold prices are driving away jewelry shoppers
It's a gold-sellers market at record-high prices.
Los Angeles Times
LOS ANGELES — Dental work for some is turning into a gold rush for others, as record prices for the precious metal are sending prospectors on the prowl for gold wristwatches, pens and even teeth.
Gold rose above $1,801 per ounce for the first time on Wednesday as investors sought protection in commodities amid fears of a double-dip recession.
Gold dealers hoping to ride the price surge are advertising on television, throwing parties in private homes and showing up at health clubs.
"With the price of gold going up and up, it's popular," said Dyan Collings Ralph, co-owner of the Curves Silver Lake/Los Feliz gym in Los Angeles, which hosted a two-day gold-selling event last month. Several hundred people stopped by, and a few sold thousands of dollars' worth of gold jewelry, said Collings Ralph, who parted with some gold trinkets for about $300.
Gold has been one of the few investments that have climbed steadily over the last 10 years. After slumbering for two decades, gold has been on a decadelong ascent, rising from about $250 an ounce in 2001 to $ $1,741 on Friday.
But while gold dealers and investors clamor for the precious metal, the high prices are driving away consumers.
Engaged couples looking to keep costs down are considering sterling silver wedding rings or choosing gold bands that are thinner. Some older couples are waiting out the price increase to get their rings resized. On retail websites such as Blue Nile, shoppers are leaving wistful comments, saying they'd buy more baubles if only gold weren't so expensive.
Activity in downtown Los Angeles' jewelry district has slowed to a crawl. Of the few visiting the district, the vast majority are looking to offload their gold rather than buy more, store owners say.
Many would-be gold sellers are unemployed or financially strapped and want to trade in their trinkets for much-needed cash.
"The guy who's losing his home — he doesn't care about gold," said Sean Mozo, chief executive of LA Golden City Jewelry.
That presents downtown merchants with a quandary: what to do with their inventory? Some are holding on to their gold, hoping the economy improves and consumer demand returns. Others are betting against a recovery and trying to clear out the precious metal by slashing prices.
Mozo is tempted to jump ship into the real-estate business, leaving all his gold in storage, in hopes that the cache will collect value like a vintage car.
"Gold is crazy," said Mozo, who was behind a counter surrounded by signs offering steep discounts on jewelry. "Business is horrible."
Around him, stalls that a few years ago were crowded with customers were mostly empty last week, save for rows of glinting display cases, idle shopkeepers and security guards. Sharing space in windows with the shimmering curtains of bangles and necklaces were signs reading "Compro oro" and "We buy gold."
Some merchants such as Omid Rabi blame the government for the surge in gold prices. The debt-ceiling debate led to havoc in the stock marketand devalued the dollar, he said, causing gold to charge higher.
A sign promising "fast cash" sits outside his store, Omid Jewelry, which he said saw a 20 percent slide in sales over the last year.
"It hasn't been easy, but there's nothing I can do," he said. "It is what it is; it's the same for everyone."