Strong Gold Price Has Shoppers Investing in Bling
Source: The Detroit News (12/20/10)
"Gold frenzy has consumers cashing in old jewelry for new pieces."
Many jewelry stores stayed afloat during the retail recession by buying gold jewelry and reselling it to refineries.
All the "We Buy Gold" signs created a new consumers' mindset that they can "cash in" old jewelry for new pieces, which is helping boost sales this holiday season.
"People bring stuff in and they basically do a trade-in, like a car," said Stevan Buxbaum, president of Buxbaum Jewelry Advisors, an affiliate of liquidation and turnaround specialist Buxbaum Group.
"They sell some of this, and they get credit, and they turn around and buy something else," said Buxbaum.
In Wyckoff, Schuring said, "We're accepting a lot of gold as payment, so old jewelry is brought in and it turns into new jewelry."
"People appreciate jewelry now because they're seeing the intrinsic value of it due to the whole cash for gold thing," Buxbaum said.
"People all of a sudden realized, 'Hey, I can't go buy a Ralph Lauren blouse and three years from now go sell.' But they can take a piece of jewelry and get something for it."
The run-up in gold has also caused silver to become more fashionable for the holidays.
Manufacturers have changed their product lines to keep jewelry affordable.
"More companies have created jewelry with semiprecious stones—and even precious stones, diamonds—set in silver," Buxbaum said.
Silver prices have risen dramatically this year as a result of that increased demand, but the price per ounce still is a fraction of the price of gold. Silver hit a 30-year record of $30.75 an ounce Tuesday.