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Prices driving consumers to trade items for cash
By JONATHAN BILYK

But the owner of The Gold Mine in St. Charles said business never has been busier than it is right now. “I’ve got people coming in all the time, with Ziploc bags filled with jewelry, wanting to know what they can get for it,” Montgomery said. “And when I tell them the number, they are almost always shocked.” The reason for the shock is the high price of gold. In the last five years, the price of gold has steadily risen. In 2003, gold was traded as low as $321 an ounce in New York. The price rose to $700 an ounce in September 2007.

And in the last eight months, the price has skyrocketed to all-time record highs near $1,000 an ounce. Thursday, after briefly touching $1,000 an ounce, the price of gold settled at $993 an ounce. The rising numbers have persuaded many people to raid their closets, drawers and jewelry boxes, seeking to turn old baubles into fast cash, Montgomery said. “I am spending a lot of money every day,” he said. “I come into the shop each day with a stack of cash, and, if I go home without any when I close, it’s been a good day. “And lately, I’ve had a lot of good days.”

Typically, a sandwich bag filled with gold jewelry can equate to about an ounce of gold. And, depending on the purity of the gold – or, the karats – a typical customer of Montgomery’s can walk out with $1,000 or more. Marlon Mathre, owner of Fox Valley Coins in Aurora, said the gold price also had stirred those with gold in other forms, as well. “Gold coins, gold jewelry, gold bars, even gold teeth,” Mathre said. “You name it, people are selling it right now.” He echoed Montgomery’s assessment of the market.

“I’ve been in business since 1981, the last time gold prices were anywhere near this high,” Mathre said. “And my business is 25 percent busier than that.” But he said customers weren’t just looking to sell their gold. There is also a great number seeking to buy the precious metal, as well. He acknowledged that prices are high. But Mathre said he has stopped asking questions. “I wondered at their judgment when they were buying gold at $850 an ounce,” Mathre said. “But it’s gone up $200 an ounce since December alone. So what do I know?” How high gold prices will go is a matter of great debate in financial circles.

Some analysts have estimated that gold could rise to $1,200 an ounce before dipping again. But Dave Brady, a financial advisor and owner of Brady Investment Counsel in Geneva, said the price already was too rich. “Gold, I think, is overshooting what I think is a reasonable valuation,” Brady said. “I certainly wouldn’t be loading up on the stuff right now.” While yielding big returns for those selling the metal, the price of gold has produced headaches for others in the trade. Randy Matz, owner of Diamond Mart in St. Charles, said the higher price of gold and other precious metals had forced him to raise the prices of many of the pieces that he sells. “But gold is a small part of what we do here,” Matz said. “The jeweler who sells gold chains and things like that, he’s got the real problem.” Montgomery noted that he has had trouble stocking his assortment of retail jewelry pieces.

“It’s hard with prices this high,” he said. “I can’t restock as fast as I would like.” But for now, he said, he will gladly work with any customer who wants to cash in their shiny objects. He said customers in particular should be keen to trade in their items that are no longer in fashion. “If you’re not wearing it anymore, at these prices, it’s not worth holding onto it anymore,” Montgomery said.