As gold prices soar to record highs, surpassing $2,400 an ounce last week, pawnshops and jewelers across the country are witnessing a flood of customers eager to sell their precious metal holdings. At King Gold & Pawn in Brooklyn, owner Gene Furman reports that the number of people coming in to sell and pawn gold jewelry is more than three times the normal levels since the rally began in late February.
While investors and metals traders debate the reasons behind gold’s recent surge, ranging from geopolitical tensions to inflation concerns, for many pawnshop customers, the motivation is simple: cash in on the high prices or get money for bills and rent. “People are using gold as an ATM they never had,” Furman remarked.
Among the sellers is Branden Sabino, a 30-year-old IT specialist who sold a gold necklace and ring last week, citing the need for cash amidst rising costs of living and a lack of savings. Similarly, 55-year-old Mirsa Vijil pawned a bracelet for the first time to pay her gas bills, expressing her willingness to do it again if necessary.
The speed and magnitude of gold’s ascent have been astonishing, with a 17% rally since the 2024 low in mid-February. While investors typically seek safety in gold during times of political, economic, and financial crises, the current demand is largely driven by Asian and emerging markets. Central banks, led by China, have been scooping up gold at unprecedented levels since 2022 to diversify away from the dollar reserve system, while regular consumers in the Asian nation are buying various forms of gold to hedge against turmoil in the country’s property sector.
In contrast, western economies, particularly the US, have seen less urgency among investors to buy gold, with online gold investment service BullionVault reporting more than twice as much selling as the previous year on its trading platform. The lack of urgency is also reflected in weak sales at the US Mint, which recorded the worst March since 2019 for its American Eagle gold coin sales.
Despite the current selling trend, some investors continue to hold gold as a safeguard against long-term issues such as rising US debt levels, the health of the banking system, and inflation concerns. Jason Collins, director at Gerrards Precious Metals in London, noted that some customers still buy gold due to doubts about banks, viewing it as a reliable asset in case of a banking system collapse.
As for the future of gold prices, Tobina Kahn, president of House of Kahn Estate Jewelers, cautions holders against waiting for prices to hit $3,000, urging them to sell now while levels are unprecedented. With pawnshops experiencing a bustling trade and more calls than ever from clients wanting to bring in their jewels, the gold rush appears to be in full swing – albeit in reverse.
