By JESSE DAVIS

jesse.davis@goshennews.com

It’s a modern-day gold rush — in reverse.

As people continue efforts to weather the recession, more and more are turning to personal effects such as jewelry, family heirlooms and even wedding rings for sources of quick cash due to the skyrocketing value of gold, now more than $1,100 per ounce.

In downtown Goshen, jewelry store employees have seen a huge increase in the number of customers bringing in old gold. According to Tatiana Miller at Snider’s Leading Jewelers, their gold-buying business is through the roof.

“On certain days I can’t even get any of my normal work done,” she said. “Today we’ve had five people come in and had at least half a dozen calls.”

Miller said the business has always bought gold, but it really started to pick up during the summer of 2008.

“Since the actual recession, it’s been off the wall,” she said. “People are selling their great-great-grandma’s ring so they can pay their NIPSCO bill. Unfortunately there’s been a lot more wedding rings, either from people getting a lot more desperate or they have had a divorce.”

The most common items being brought into Snider’s are heavy rings, chains, bracelets and broken jewelry people can’t afford to fix. They will buy anything made of gold, including dental gold and bullion.

Along with those, however, there has also been an influx of high-end or heirloom items. From service award rings to a sterling silver tea set, Miller has seen all kinds of items. The most they have paid for a single piece, she said, was for a gold Krugerrand coin from South Africa, at $1,000.

One particular item that stuck out in her mind was a piece of authentic Victorian-era mourning jewelry. Such pieces, along with their style and value, would hold a lock of hair or drop of blood from a deceased family member. The one sold to Snider’s was a gold bracelet with a lock of hair in it.

Thinking it through

It is exactly those type of pieces that John Sorg of Sorg Jewelers refuses to buy.

“If it’s a nice piece of jewelry I talk them into keeping it,” Sorg said. “If they’re just trying to get money (for a family heirloom) I don’t think it’s right to accept it.”

Sorg’s opinion is that although we may be in recession right now, things will turn and people will never see those items ever again if they sell them for the gold content. He said that of the pieces people bring in, he tries to turn back a little less than half of it.

“These items are real old and very unique,” he said. “Some of that stuff you can’t put a value on.”

He also pointed out one of the problems with selling jewelry. Jewelry stores have little use for precious stones set in jewelry due to the extensive amount of work it takes to remove them properly. Because of that difficulty, some don’t bother trying to salvage them. According to Sorg, the customer isn’t always aware of just what they are giving up.

“Places will take things and take the stones out and don’t tell the customer what they have,” he said. “It’s a shame.”

According to Miller, Snider’s will hold onto diamonds, but with some pieces will not make an offer due to the stones to avoid such a problem. She said if the person is still dead-set on selling the item, she suggests Ebay or some other venue where its total value, not just the value of the gold, can be taken into account.

Sorg said some customers get a big letdown when they bring in pieces that turn out to be less than genuine.

“They think if it’s yellow, it’s gold,” he said.

Part of the problem, he said, is with items purchased outside the country.

“If stuff is bought overseas, it has to be tested,” Sorg said. “It can be stamped 14k and not be gold. Outside the country, you can stamp everything you want.”

Another option

For Tom Howard, the playing field is a little different.

Howard is director of operations for World Wide Jewelry & Pawn in South Bend and sits on the board of directors for the National Pawnbrokers Association.

“Here you get the same value as if you were selling,” he said, “but if times get a little better or you feel you shouldn’t have sold it, you can come back, pay the loan back with a little bit of interest and get the item back.”

Approximately 80 percent of items sold to pawn shops are repurchased by the owner, according to Howard.

“We try to impress on the person that they can come back and get the item,” he said. “If you put it in an envelope and send it off to (a buyer) in Florida, it’s gone. You can’t get it back.”

He said this type of collateral loan is a significant step above such businesses as payday loan providers and early check cashers, where interest rates are extremely high.

The industry has been seeing a surge in gold items pawned due to the current value of the precious metal. Howard said gold jewelry has always been a regular commodity for pawn shops, but that it is different now. In fact, gold is continuing to set records, breaking $1,150 per ounce for the first time during trading Wednesday, before closing at more than $1,143.

“You’re starting to see a little bit of better quality jewelry than we’ve seen before,” he said. “We’ve had a few unique items, including antique jewelry and also carat and carat-and-a-half diamonds that you don’t see too often.”

With the current strength of gold values, it’s a trend he doesn’t see ending any time soon.

“Over the last few years, (the price of gold) has been steadily increasing,” he said. “It will go flat for a few weeks or months at a time, and it’s taken a couple of little dips, but from what I’m hearing, it’s just going to continue to go up. I don’t think we’ve seen the high of it yet.”