As gold jumped above $1,000 last week, Mark Murado decided to trade in his gold bracelet and necklace, earning a sixfold profit.
“With the gold prices so high, and the recession going, why not sell something I never wear?” Murado, 30, of New York, said three days after the metal surged to $1,013.70 an ounce. He sold the jewelry to EZSellGold Inc. in Manhattan for $3,500, up from the $500 purchase price in 1994.
While Standard Bank Ltd. predicts prices will rise 7.8 percent by the end of the year to $1,100 and Barrick Gold Corp., the world’s biggest producer, is spending $5.6 billion to bet the rally will continue, consumers are speculating that price gains are limited after a nine-year rally. Scrap sales, including used jewelry, will rise 22 percent in 2009, said Philip Klapwijk, the chairman of industry researcher GFMS Ltd.
Individuals are selling as the deepest recession in more than 60 years sends the U.S. unemployment rate to the highest level since 1983. The slumping economy has erased $13.9 trillion in household wealth, according to the Federal Reserve. Investor demand for a refuge from tumbling prices of financial assets sent gold up 31 percent in the past year.
