Hold That Gold? Buyer-Seller Activity is Rising With Price May 7, 2006 – Posted in: Press
By STEPHANIE MURPHY
Published: May 7, 2006
Palm Beach Daily News
All that glitters is not gold. But there may be a gleam in the eyes of anyone looking at 25-year-high prices for the precious metal, which flirted with $684 an ounce at the close of business Friday.
Buying and selling abounds, based on dealers’ reports of increased gold activity in Palm Beach and elsewhere.
“Gold and oil go together and are continuing to go up,” said Tobina Kahn, who heads the Chicago store of Palm Beach-based House of Kahn Estate Jewelers, 231 Peruvian Ave. “The price jumped $10 from [Thursday].”
In Kahn’s Chicago store near Bloomingdale’s, “people are coming in every hour to sell gold jewels because they realize the price is so high, they’ll get more than anytime in the last five years.”
According to Ryan Denby of Austin Rare Coins in Austin, Texas, a member of the Gold Information Network, the price of gold has increased almost $95 in the past 30 days, and $253 in the last year, a jump of 59 percent.
Denby’s precious metals brokerage has “never been busier,” he said. “It’s absolutely insane. Mainly, people are buying. Not that many are selling here – not investors,” because they are convinced prices will go up more.
In Palm Beach, Adele Kahn is selling gold jewels, gold compacts, gold purses, chains and brooches “for a good deal, because we’ve been collecting it for years.”
Tobina Kahn predicted gold will go to $1,000 an ounce, “maybe within six months. It could be $800 in two months.”
Gold prices have escalated so quickly that people are taking advantage, said Ray Duclos, the owner of Rechant Precious Metals, in business in West Palm Beach for 29 years. Sellers can double their money on gold purchased in 1999, when the price was less than $300 an ounce, he said.
“The last two or three weeks are the busiest since 1980-81, when it was up to $850 and we had people lined up at the door,” Duclos said.
Business is up all over the country, said Chris Del Gatto, chief executive officer of CIRCA, a jewelry-buying firm based in New York with an office in the Palm Beach Towers.
“People are reading about gold prices, so there’s more awareness,” Del Gatto said. “If they have items they are thinking of selling, now is the time. Gold was undervalued for a while, now it’s getting to where it should have been.”
He predicted “there is some room for the price to go a little higher, but not much.”
Anticipating gold prices is like reading the stock market, said Evangelos Kanaris, co-founder of The Palm Beach Jewelry & Antique Center at 333 S. County Road.
“It’s a gamble if you’re not experienced. I cannot encourage you to sell, and then the price goes much higher,” Kanaris said.
It also depends on how much gold a person owns, Kanaris said, explaining, “If you have a lot, you can expect a 40 percent profit. So with large amounts, 50 kilos, yes, sell, because you can double your money.”
Uncertainty in other sectors such as oil affects people’s perceptions about gold, Kahn said.
“Precious metal is an old-fashioned asset, it’s solid,” which appeals to many investors, she said. In addition, an emerging middle class in both China and India creates new demand for jewelry, pushing prices up.
Denby of Austin Rare Coins said consumers buy gold as a hedge against their increasing disillusionment with the capital markets.
“There are a lot of inflation fears now,” he said. “Everything is more expensive. . . . It’s the value of the dollar going down and less purchasing power.”
Still, even the wealthy “want a good deal,” Tobina Kahn said. “So people are taking advantage. Wealthy people pay attention to the stock market. They don’t need to sell their jewelry, so they buy.”