Digging for gold in jewelry boxes

High commodity prices, slow economy bring little-worn keepsakes to market

Email|Print|Single Page| Text size + By Ralph Ranalli
Globe Staff / May 22, 2008

Call it the ex-boyfriend economy.

Christine King's old high school flame, Dave, treated her to a Kanye West concert last week, even though the 28-year-old from Franklin hasn't seen him - or admittedly even thought about him much - for years. Or more precisely, it was a 14-karat gold chain he bought her that funded her trip to the Tweeter Center.

The necklace had been forgotten since their breakup a decade ago, King said, until the other evening, when she was sitting around lamenting her lack of discretionary income. Then she saw a television news report about the sky-high price of gold, and her relationship with the necklace suddenly had a much happier ending.

"It was just typical high school - it was: 'I'm going to college now, see you later,' " she said as Russell Smith of Sheldon Jewelers in Framingham examined the piece through a magnifying visor. "And the necklace went into the closet."

Now, she said, it was the chain's turn "to move on." With a few other odds and ends bringing her total to about 5 grams of gold jewelry, King pocketed a little over $44, just a few pennies shy of the cost of her concert ticket.

She's not alone in cashing in old treasures. These days, many people are finding that anything that helps pay the grocery bill or the gas station attendant is worth its weight in gold. Meanwhile, record prices for precious metals have sparked an unprecedented assault on jewelry boxes and dresser drawers in households across the region, and have kept scales plinking and clanking at stores like Sheldon Jewelers and Hudson Pawn, which specialize in buying old gold.

Smith, who helps run the Route 9 business that bears his father Sheldon's name, said that the rise in prices for gold and platinum has been breathtaking.

"When I got out of jewelry school in 2005, gold was $350 an ounce and platinum was $700 an ounce," said Smith, a 28-year-old graduate of the jewelry program at the prestigious North Bennett Street School in Boston's North End. "Within six months, it doubled. From there, it fluctuated, and then last year it just went boom, and took off again."

Smith and other gold buyers say that three factors have created an unprecedented wave of sellers, as people cash in gold jewelry.

First, rising gas and grocery prices are prompting the search for other sources of income. Second, yellow gold, which was all the rage back in the 1980s, is now largely out of fashion, meaning that many people have pieces they are unlikely to wear again. And third, the price of gold (more than $900 for a troy ounce earlier this week) is near all-time record highs.

"And look, how many fashion items can you resell?" Smith said. "Women buy shoes all the time, can they resell them? No. Gold, you can always resell it. You can even sell your teeth. I've bought teeth before."

More gold sellers, Smith said, means more gold buyers. Area jewelry stores that used to refer business to him are now buying gold themselves, and have become his competitors, he said.

Steward Medoff, a gold wholesaler and pawn broker at Hudson Pawn, said that the number of jewelry and antique stores he buys gold from has doubled and even tripled every year for the last several. For many small jewelry stores, he said, it's a matter of survival.

"For some of them, if they're not buying gold, they're going out of business, because no one is buying jewelry these days," he said. Some jewelers, he said, are even selling him their unsold, never-worn stock of yellow gold jewelry because it is more lucrative to wholesale it out.

Not everyone has joined the gold rush, however.

Bernie Segaloff, third-generation owner of Segaloff Jewelers in Needham, said that he is too concerned about his reputation to start buying gold. Commodity buying and selling is a complicated business, he said, and a person who sold three 14-karat chains on a day when the price of gold was down might not fully understand why they received significantly less than a friend who sold three 18-karat chains on a day when the price was up.

"All it takes is one person who feels they got cheated, and the reputation you've spent years building can go up in smoke," he said. "But for every jeweler like me, there are a dozen more" buying gold.

While the buyers say business is booming, gold sellers say they're just doing what they can to survive in slow economic times.

Rita Adams, a stay-at-home mom from Natick who sold more than $1,000 worth of old gold (including a "very thoughtful" gold and pearl ring from an ex-boyfriend) to Smith last week, said the proceeds were going to fuel a vacation with her husband to Aruba, where they have a time-share condo they have been unable to use.

Yet Adams was also quick to mention that it now takes $50 to half fill the tank of her family's SUV, a GMC Yukon Denali, and how high gas prices have made it tough on her husband, a firefighter who takes contracting jobs on the side.

"It's hard to give a free estimate when you're spending the gas getting there and back," she said.

Smith said that even though most of his customers are selling because of the economy, it seems to help many of them to think about the proceeds as being found money.

"Some people are taking this money and paying off the heating bill," he said. "But for the most part, people say they are taking this money and enjoying it - they're going to Foxwoods, they're going on vacations."

Several of Smith's other costumers, though, were frank about why they were selling.

"I'm a check-to-check kind of girl, and that's why you sell stuff, to get some extra cash," said Debra McDonald of Marlborough, who works as a dispatcher for a Framingham company that sells emergency beeper pendants to the elderly. "I'll probably use it to pay a bill."

McDonald's small pile of gold jewelry on the counter at Sheldon Jewelers included an 18-karat "corna," or horn, and a "mano cornuta, " or horned hand - Italian charms that are supposed to bring good luck.

While the charms were a staple of her jewelry wardrobe two decades ago, she said, she had long since forgotten who gave them to her or what exactly they were supposed to do.

"I'm half-Italian and it's supposed to ward off something . . . I think. Like maybe evil spirits. My mother believed in that," McDonald said, holding up the gleaming gold horn on its chain. "Now its helping me ward off poverty."

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