One man's gold is another's tank of gas
Record price and slow economy find many parting with jewelry
It's a Friday afternoon in Everett and Andrew Hagen steers his Ford F-150 truck into a parking lot and walks into the Gold N' Oldies jewelry store. For Hagen, it's been a slow work week, and the carpenter needs gas money for his truck. He reaches into his pocket and places on the counter a gold necklace with three small diamonds.
"It's an ex-girlfriend's chain," he tells Conrad Casarjian, the shop's owner.
Casarjian places a jeweler's loupe over his eye and examines the chain and diamonds. "It's 14-karat," Casarjian says, holding it up.
Hagen, who is 24 and lives in Melrose, says the record price of gold - more than $900 an ounce - and a tough economy have forced him to sell gold in the past. "I've paid rent with gold, especially this past winter. I had a lot of scrap chains I wasn't wearing," he says.
Casarjian hands Hagen $75 and the transaction is completed. Casarjian looks at the chain and small diamonds. When asked what he'll do with the necklace, Casarjian says he'll probably "scrap it."
In the lexicon of jewelry store and pawnshop owners, scrap has never been a more important word. For Casarjian, as much as 90 percent of gold he buys is sold to wholesale refineries. Those companies melt down the metal, remove its alloys, and resell it as pure gold.
As the economy has slowed, gold prices have risen. Last month, gold hit a record of more than $1,000 per ounce and is up more than 10 percent since the beginning of the year. Over the last 10 years, the price has tripled.
While economists have debated whether the country is in a recession, Casarjian and some other area jewelers and pawnshop owners have seen more and more customers who have fallen on hard times bringing in gold necklaces, chains, rings, and anklets. At pawnshops, customers trade their goods temporarily for money and have the option to pay the loan back or keep the cash.
"I'm seeing people I'd never see before," says Casarjian, who has owned his Everett shop for more than 20 years. "Tough economic times bring out a lot of desperate people. People will walk in and say 'I really don't want to do this,' but they do it because they have to raise some money to pay off their latest bill. People are hurting, they're broke."
With a sluggish economy and rising gas and food prices, the high price of gold could serve as a temporary boost to people who need to pay their bills, says Kenneth Ardon, an associate professor of economics at Salem State College.
"Without gold being as expensive, these families would be in more trouble," says Ardon. Still, while selling gold serves as a temporary payday, Ardon predicts more families will have to curtail their spending until the economy improves. "As long as gas prices and food prices rise, more and more families will come under strain in their budgets, so I think this is probably something that will continue."
In Chelsea, Sal Vaccaro says more people are choosing to sell their gold instead of pawning it. "We see a lot of older people who can't make it on what they're getting from Social Security," says Vaccaro, who owns The Gold Mine, a jewelry store and pawnshop on Broadway.
For Vaccaro, the gold chains, necklaces, earrings, and rings he buys all go to scrap. Much of it is outdated and from the '80s, but Vaccaro says with talk of recession, most people can't afford to buy gold jewelry anyway. "There's no point in holding onto it for resale because resale isn't any good," he says.
Paul Frazer, who owns Gold & Diamonds Etc., a Malden jewelry store and pawnshop, says the high price of gold has also been a boon for people who are financially solvent and want to fetch a high price for their old jewelry. "People are cashing in stuff that's been sitting, that they're not wearing," says Frazer.
But in Beverly, Frederick Ambrosini says the people who are selling their gold represent a growing group of recently unemployed workers who need money for food. "What I do see is an increase of people starting to panic," says Ambrosini, who has owned
While most people are selling, there are people who still choose to pawn their wares. On a sunny morning last week, Stanley Starling walked through Central Square in downtown Lynn carrying a gold chain, earrings, and a ring.
"Sometimes things get bad," he said, stepping inside the A & S Pawn and Used Jewelry store on Washington Street.
He placed the gold jewelry on the store's glass counter and pulled another gold ring off of a finger and added it to the pile.
Starling, who is 49 and originally from Chicago, needed money for his girlfriend, who was about to start a new job. "She needs transportation money to get to work," said Starling, who once worked as a shipping clerk but is now disabled.
Al Sherman, who owns the Lynn pawnshop, examined the jewelry. "There is some 10-karat and some 14-karat," he said.
On this day, Starling decided he wanted to get the gold jewelry back at some point and chose to pawn it.
Sherman handed him $60 and told him he would charge $6 - or 10 percent interest, as allowed by state law - a month.
"It'll last long enough until my girlfriend gets her first paycheck," said Starling, before leaving the store.
Steven Rosenberg can be reached at rosenberg@globe.com.
