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Gold really is precious, but it's not cherished

As metal price soars, former keepsakes being sold for cash

Gold has risen to nearly $1,000 an ounce, and people are cashing in their jewelry and stashes of coins to raise money quickly. Gold has risen to nearly $1,000 an ounce, and people are cashing in their jewelry and stashes of coins to raise money quickly. (Paul Beaty/Associated Press)
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Associated Press / March 12, 2008

CHICAGO - A new kind of gold rush is unfolding at jewelry store and pawnshop counters - featuring not prospectors, but consumers.

White-collar workers, retirees, and many others have been digging through jewelry boxes and safe-deposit boxes to cash in as gold prices flirt with $1,000 an ounce. Coins, old wedding rings, necklaces from ex-boyfriends, hand-me-down gold pieces - everything is fair game when it brings this kind of profit.

Shop owners across the country are marveling about the phenomenon they say began in the latter part of 2007 and accelerated through the winter, reflecting torrid gold demand like none had ever seen. There are even gold parties, where people sell their jewelry.

"Everybody's trying to sell," said Richard Rozhko, owner of a jewelry store in Chicago. "People are trying to cash out because they don't believe that gold's going to go higher than $1,000 or $1,200" an ounce.

Rachel Weingarten, a New Yorker who has a self-described obsession with "shiny trinkets," didn't need to sell but couldn't resist when she saw prices soar like those of an overinflated tech stock.

"When I saw the prices going through the roof, I saw it as an amazing opportunity to rid myself of jewelry that no longer suits my taste or status," said Weingarten, a marketing consultant. "It's also been a lot of fun to get cash for stuff that is broken or just really ugly or just takes up room in my drawers."

Royal Pawn Shop, a 75-year-old business within earshot of passing El trains in Chicago's South Loop, has display cases sporting fancy gold rings, bracelets, and watches along with racks holding hundreds of pawned fur coats. It also has more office workers as customers these days - mostly sellers, not buyers - who bring in gold chains and rings.

"It's stuff that's lying around the house, so they figure: Why not make money from it?" said co-owner Wayne Cohen. "The price of gold is so ridiculously high that they'd be stupid not to get rid of it."

Others are selling to help cope with tough times in an economic slowdown.

Three miles across town, Division Gold store's owner, John Vela, recounted housewives coming in to pawn treasured items from their jewelry boxes and numerous clients saying they needed money to pay their property tax bills and take care of other financial obligations.

"I have mortgage brokers, real estate agents, retail shop owners. They're nervous, you can see the stress on their faces," he said.

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