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Friday, March 14, 2008

The rising value of gold leads to a seller's rush

Texas, U.S.A :As the economy falters, gold glistens.

Fears of a recession, the credit and housing crunch, slumping retail sales, higher energy prices and unemployment have propelled the precious metal's value to new heights.

Gold reached a milestone Thursday, hitting an all-time high of $1,001.50 an ounce in trading before closing at $993.80.

With those prices, it shouldn't be a surprise that across the Houston area, stores that deal in gold are doing brisk business with customers wanting to sell their jewelry and those looking to buy.

At U.S. Coins & Jewelry in the Spring Branch area, a man walked in Thursday with a few pieces of jewelry he had lying around the house.

" 'The only reason I came in is that I saw that story on the news,' "' store sales manager Nick Koutsodontis said the man told him.

At the Houston Gold Exchange, owner Brad Schweiss said there were "housewives cleaning out their jewelry box, getting rid of some things they haven't worn in the last 20 years. A lot of people are selling off their yellow gold because it's no longer in style," he said. "We're getting a little bit of everything.

"The awareness level is definitely increased, and it has sparked additional activity," Schweiss said.

The last time he saw a rush this big was in the early 1980s, when gold hit $850 an ounce.

Other Houston-area residents are buying gold, viewing it as a safe investment.

Richard Plance, the manager of a wellhead company in Humble, has been purchasing U.S. gold coins and bullion from U.S. Coins & Jewelry for years.

"I'd like to buy more if I could," Plance said. "My 401(k) has nose-dived."

He had been waiting for gold to hit the "magic number" of $1,000.

"I expect it to go up even higher," Plance said, "just like oil did when it hit $100 — especially the way the economy is right now."

Too expensive for some

Though gold's increasingly steep price is prompting some people to either cash in or stock up, others in the market for gold jewelry are being priced out.

On Hillcroft, where jewelers have catered to the city's South Asian community for years, shop owners say customers are being hit with sticker shock.

Gold sales have slowed about 50 percent since February at Kirti Jewelers, owner Suresh Shenoy said. He orders new inventory monthly instead of weekly now, and he's been encouraging shoppers to buy more diamonds.

"People are just waiting to see if it will go down," Shenoy said. "Now people are just buying it when it's absolutely necessary for a wedding or something."

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