Sellers rushing to unload gold

Biggest runup in 30 years is keeping dealers, pawnshops busy

Skyrocketing gold prices have people looking everywhere for a mother lode.

"We've got people flopping their teeth on the counter once a week," said Reliable Loan & Jewelry owner Alan Horwitz in Raleigh.

The biggest runup in gold prices in nearly three decades has sparked a new kind of prospecting at pawnshops and coin dealers across the Triangle. From corporate executives to retirees, people are raiding jewelry boxes and safe-deposit boxes for heirlooms, coins or anything else that might contain a bit of the precious metal.

A customer recently sold a set of 14-karat tooth caps at Gold-N-Pawn in Garner, co-owner Elizabeth Williamson said. At Mattox Coins & Stamps in Raleigh, one man brought in six fillings, owner Doug Mattox said.

"I haven't seen as many people selling gold as they are now," Horwitz said, displaying a box filled with several pounds of class rings, broken earrings and chains. "We get 25 to 30 customers a week selling gold. Maybe 50.

"It's people from both sides of the tracks, from your $5 customer to your $50,000 customer," he said. "They're all selling gold."

Gold prices began rising last year and hit a record of $1,033.97 an ounce March 17. On Monday, gold futures for April delivery had dropped to $918.70 an ounce on the Comex division of the New York Mercantile Exchange. Still, that price was 52 percent higher than the average for 2006.

The big increase is largely the result of a weaker U.S. dollar, which makes gold and other metals attractive to investors as a hedge against inflation.

Gold dealers said they haven't seen anything like it since the late 1970s and early 1980s. The price of gold doubled between 1979 and 1980 to about $615 an ounce, which would be worth $1,547 in today's dollars.

"People were lined up out the door with old class rings and wedding bands," Mattox recalls.

Carolina Jewelry & Pawn on South Saunders Street in Raleigh advertises with a sign that reads "Need $4 Gas? Bring Your Gold." On the counter, a laptop computer monitors real-time gold prices.

Manager Chad Fields said the customer mix has changed from the regulars selling electronics or used power tools.

"One guy brought in $200 worth of broken earrings," Fields said. "Two days ago, a guy had a $200 gold chain. You got people cleaning out their jewelry chests for stuff they're not wearing."

Selling gold is easy -- pawnshops and dealers toss it on scales and make an offer. But getting the best price is more challenging.

Gold sales aren't specifically regulated by the state. But sellers are advised to get several estimates from reputable jewelers, state Attorney General's Office spokeswoman Noelle Talley said.

Frank Ragsdale, a fifth-generation jewelry story owner in Raleigh, said sellers must know what they are selling to get the best price.

Gold prices are quoted on the spot market for pure gold, or 24 karats. But most jewelry is between 10 karats and 18 karats. Jewelry made with less than 24-karat gold has only a proportionate value of the prices being quoted. For example, 18-karat gold is worth 75 percent the 24-karat price, he said.

Subtracting a percentage for overhead and profit, Ragsdale said sellers should expect about 70 percent of the spot price for their pieces of gold. For example, if gold were selling for $1,000 an ounce, an ounce of 14-karat gold jewelry could bring about $409 from a reputable buyer.

"It's imperative the people selling this understand what they've got and get the purchaser to explain how they are being paid and why," said Ragsdale, owner of Jolly's Jewelers and Silversmiths in North Hills.

Overhead varies from dealer to dealer, and buyers concede that horse trading has much to do with the prices they offer for gold.

That helps explain the wide range of offers last week for a pair of 14-karat wedding rings and a 10-karat white gold college class ring.

At Cary Jewelry & Pawn, clerk Franklin Sandria offered $60 for the wedding bands and $60 for the class ring -- $120 total.

But at American Pawn-D-Rosa in Raleigh, the bid was $100 for the class ring, and a clerk said bartering for the wedding bands would begin at $40 and top out at $80. That's a maximum of $180 for all three rings.

Carolina Jewelry & Pawn, also in Raleigh, offered $115 for the wedding rings and $230 for the class ring, or $345 total.

Fields, the manager, explained another piece of speculation that figures in pawnshops' transactions: Because the state requires dealers to hold gold purchases for seven days, prices have ample time to fluctuate.

"It can go up or down while I hold it," Fields said. "I can win, or I can lose."