Record gold prices boosting business at pawn shops

April 22, 2011 3:19:02 PM PDT
It's a gold rush of sorts at area jewelry stores and pawn shops. Record high gold prices, now above $1,500 an ounce, have many people looking to cash in on gold valuables they no longer want.

"I've been in business all my life and I've never seen so much stuff come in," said Randy Cohen of Royal Jewelers and Loan.

Cohen tests the authenticity of the gold with chemicals.

"You have to test it all because a lot of it's phony out there," said Cohen.

As the price of gold rises, customers are cashing in. One customer brought in some jewelry and left with $6,000 from Royal Jewelers and Loan.

"The gas is going, the economy is going up like crazy," Cohen said. "They need money to get around. The only thing they have is a little gold left. They're just scrapping everything."

Gold struck a record high Thursday: $1,508 an ounce.

And gold is increasing in value as the dollar loses value. It comes as Chicagoans are looking for help.

Galina Goldberg at The Devon Pawn Shop has seen a change in clientele.

"We see people who come from the North Side, even from Northbrook, Highland Park, and we're not used to seeing this before," Goldberg said.

Goldberg says most people used to want loans, but now they just want the money, and the pieces being sold are gifts and family heirlooms.

"They used to think, 'Pawn shop, it's not good.' Now we know for sure, we are really good and people need us," said Goldberg. "People are not ashamed anymore to come to a pawn shop to borrow money, to pay mortgage."

The price of gold is based on 24-karat gold. Most jewelry is 10, 14 and 18 karat.

There are many places to sell your precious metals. You can shop around until you hear a price that works for you.

Silver prices are also up. Brokers are seeing a lot of silver coming in.

While pay outs are tempting, but would-be sellers should know the shops will only hold the items for a set amount of time, then much of it is melted down.