By Angela Miles
First Business News
Aired On: February 2nd, 2010

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By DIAN VUJOVICH
Article originally appeared in the Palm Beach Daily News
Friday, December 25, 2009

It’s that time of year when all that twinkles aren’t only the lights on your tree or the returns on gold. Look at how silver has performed this year — and surprise, surprise, it sparkles, too. In fact, it has actually outperformed gold.

Who knew?

Some might say this versatile metal doesn’t have the sex appeal of gold. But when it comes to making money, why care about sex appeal. That seems to follow quite naturally as one’s fortunes mount. But enough about that: Let’s look at the numbers.

At the beginning of 2009, silver was trading at $9.46 an ounce, according to Silvercoins.com. By the close of business on Dec. 2, it had reached $19.21 — more than doubling in price. Gold, on the other hand, was up about 60 percent.

During the past 10 years, silver’s price has gone from a low of $4.02 to a high of $20.79 — an increase of more than five times. Gold’s prices ranged from roughly $280 to $1200 an ounce. While impressive, silver’s gain was greater.

“Both gold and silver are viewed as safe-haven assets and both have been used throughout history as mediums of exchange,” says Nicolas Brooks, head of research and investment strategy at ETF Securities in London. “When investors are concerned about the macro economic environment, rising fiscal deficits, they look for alternatives to the U.S. dollar. Like gold and silver to act as a hedge when currencies are weakening or there are concerns about inflation.”

While silver may not carry the same cachet, it typically performs better than gold during precious-metal bull markets like the one we’re experiencing, but doesn’t garner the same amount of news or advertising attention as gold. That’s too bad, for like gold, silver provides an alternative to a currency play and performs well in times of high inflation.

If there’s one primary difference between the two metals, it’s in usage: Unlike gold, most of silver’s uses are industrial.

“Silver is unique in that it’s a hybrid between a precious metal and an industrial metal,” adds Brooks.

In 2008, for instance, 53 percent of silver production was used in industrial applications because of its strength, malleability electrical and thermal conductivity and reflectivity — think mirrors here; 19 percent for jewelry; and 13 percent, photography — that figure is likely to a decline going forward as the world changes from film to digital cameras; 8 percent, coins and medals; and 7 percent silverware, which includes everything from candle sticks to platters and silver-service sets to chandeliers.

Silver’s presentation, therefore, may be beautiful or barely noticed.

And you’ll find no shortage of mining locations for this metal. The top eight silver-producing countries last year were Peru, Mexico, China, Australia, Chile, Poland, Russia and the United States.

Although production has dropped, silver is still inexpensive, serves as a good indicator of manufacturing cycles, and historically has been used as money more than gold has.

According to CMIGS, a Web site dedicated to educating investors about the benefits and dangers of the precious metals markets, “In something like fourteen languages, the words for silver and money are the same. ”

Earlier this month, Paul Urban brought an ornate six-piece sterling tea set and 14-piece sterling buffet set to Tobina Kahn at the House of Kahn Estate Jewelers in Chicago for her to appraise and sell. Urban, who produces ice-skating shows and at one time was a professional skater himself, has traveled the world performing. Throughout his journeys, he and his wife would make purchases of gold and silver wares and bring them home.

“Being in show business, we did a lot of entertaining, ” said Urban, who is also a talented magician. “But we’re not entertaining as much anymore so I’m beginning to unload a bit of what we have. ”

Reluctant to say precisely how much he paid for the either set, Urban is well aware of the profits a sale could bring. He also isn’t selling all of his silver. “I have other things, like silver chargers and silver chaffing dishes. But I also own an apartment complex and my taxes are due on it.”

Like every other kind of investment on the planet, no profits can be had until you sell what you own.

So given the current rise in silver prices, Urban’s expecting the sale of his sterling to provide him with more than the amount needed for his taxes. No abracadabra necessary.

But investing in silver isn’t without its risks. Play this precious metal and you’ll be playing with volatility. On the other hand, demand for it will continue to grow as world economies do, production lags and, when there’s a rally in gold, there’s also likely to be one in silver.

“Silver is trading very much like an industrial metal now,” says Brooks. “If we see an asset correction based on concerns about growth, I think silver gets hit. But, if the U.S. government debt continues to rise, its price is likely to rise. It does, however, tend to be a more volatile commodity than gold.”

Given that reality, Brooks suggests investors with a diversified portfolio of stocks, bonds and other assets, keep the weightings in silver in their portfolios, less than that of their gold holdings.

The Lone Ranger

If you remember the television show The Lone Ranger, you’ll no doubt recall Tonto, the Native American who saved his life in the popular series that began in 1949.

Together, the Lone Ranger and Tonto performed a number of heroics, but perhaps one of the most remembered was when they saved a silver-white stallion from being gored by a buffalo. As the series showed, they nursed that horse back to health and then set him free. But the horse would have none of that and followed them. As a result, the Lone Ranger decided to keep him and name him Silver.

If you remember the series, you’ll also remember hearing the Lone Ranger’s hearty exclamation of “Hi-yo, Silver, away!” as they rode toward the golden sun set in each episode.

Investing in silver is a little bit like that, whether your investment is in silver bars, tea sets, stocks, ETFs, medallions, coins or future’s contracts — at the end of the day, its price follows that golden trail.

WAYS TO INVEST IN SILVER

There is no shortage of investment choices when it comes to silver. From bullion to stocks, Exchange-Traded Funds to coins, there’s something for every investor no matter how much money they have to invest.

Suggestions from The Silver Institute include:

* Bullion. Consider silver in the form of bars that are at least 99.5 percent pure.

* Official Coins and Medallions.

* Futures and/or or Forward Contracts: An agreement made on an exchange to take or make delivery of silver at a set date in the future.

* Options: The right, but not the obligation, to buy or sell silver or a financial security linked to silver on a specified date in the future.

* Exchange Traded Funds (ETFs): These represent a basket of equities linked to silver, i.e. the physical metal, producers, refiners, etc. ETFs are traded on exchanges throughout the trading day.

* Mutual Funds: An open-ended fund that holds a basket of silver-related equities that are priced once daily.

Back to the ETFs. Silver ETFs have seen enormous growth recently and while investment strategy of some is to basically reflect the price of silver, others use more intricate strategies. So, make sure to do your homework before purchasing shares.

A few ETFs that invest in silver and trade on the New York Stock Exchange include: The ETFS Silver Trust (SIVR); iShares Silver Trust ETF (SLV); PowerShares DB Silver (DBS); E-TRACS UBS Bloomberg CMCI Silver ETN (USV), Ultra Silver ProShares (AGQ); and ProShares UltraShort Silver ETF (ZSL).

Learn more about investing in silver at The Silver Institute’s Web site, www.silverinstitute.org/investing_in_silver.php. And at CMI Gold & Silver at www.cmi-gold-silver.com/buy-silver-bullion-coins.html.

Article originally from the Palm Beach Daily News. View the original article here.

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Author Peter A. McKay
Article originally from Wall Street Journal Marketwatch.
Originally published December 21th, 2009

We figure that now is a good time to check in again with Tobina Kahn, a Chicago estate jeweler we’ve used previously as a highly unscientific barometer of gold demand and the economy’s woes.

Through most of the post-Thanksgiving period, she said there have been more sellers than buyers passing through her shop, with many saying they need to unload family heirlooms to raise cash to pay bills, mortgages, or other expenses. In the last few days, the buyer/seller ratio has evened out, but not necessarily for a pleasant reason.

Ms. Kahn attributes some of the increase in buyers to last-minute gift shopping. But a good chunk of it — perhaps a third — consists of people looking for jewelry as an investment for themselves in lieu of stocks, bonds, or other “paper assets.

One telltale sign: Ms. Kahn said she got four emails Monday seeking jewelry that incorporates gold coins — an apparent attempt to hoard the coins from a source that has been relatively untapped during gold’s recent run to new records, which has exhausted the supplies of many traditional coin dealers.
“A lot of these coin pieces were made in the sixties and have been out of style for awhile,” said Ms. Kahn. “A few years ago, I couldn’t give them away. Now, I get four emails in one day asking for them? You can tell it’s not people shopping for their grandmas and cousins.”

Article taken from Wall Street Journal Marketwatch. Click here to view actual article.

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Author: Matthew Scott
Article originally from Daily Finance Beta, an AOL money and finance site.
Originally published December 5th, 2009

As gold catapulted to another record high last week on its run to who knows how high, some investors may be wondering if buying in now will leave them enough room to make a profit on their investment. While analysts and traders are telling anyone who will listen that gold is heading higher still, individual investors should be aware of gold’s volatility as an investment. Diversifying a portfolio with gold may not make sense for everyone.

If you listened to Wall Street this week, gold sounds like an investment no-brainer. On CNBC’s SquawkBox Wednesday, Lou Grasso, a gold trader at Millenium Futures and Peter Schiff, president of Euro Pacific Capital were bullish on gold. Grasso’s prediction of $1,800 an ounce was characterized as “cautious” while Schiff’s projection of “$5,000 an ounce before Barack Obama leaves office” (Is he suggesting 2012 or 2016?) understated as “optimistic.”

Resistance Is Futile

When the professionals are forecasting 50% growth from its current level, how could anyone resist gold? The problem is no one is resisting. Gold has risen 3.7% this week and 37% since Jan. 1. There are a number of reasons for gold’s rise, including the structural decline of the US dollar, rising inflation expectation and financial market uncertainty as Dan Burrows outlined in a DailyFinance post on Wednesday. But gold still carries significant risk.

In fact, the risk associated with gold was on display this week: gold hit another record high on Thursday, as gold futures (/GC\Z09) climbed as high as $1,226.40 an ounce before settling to $1,207.50. Then, gold plummeted Friday morning and ended down $60.60 for the day as investors took profits after positive news on unemployment.

Such is the volatility that comes with a commodity that doubles as a currency. So individual investors must be clear on why they want exposure to gold, what their risk tolerance is and which investment vehicle they believe can best achieve their goals.

Decisions, Decisions

“The investor has a real choice to make,” said William Rhind, strategies director of ETF Securities, “Do you want to own gold, or do you want to own something that gives you the performance of gold, but is not gold?”

If investors decide to buy gold through an exchange traded fund (ETF), they gain access through a liquid and trade-able format that is backed by physical gold and tied to real movements in the gold market. In general, ETFs trade like stocks and are one of the cheapest and least risky ways to invest in gold.

“With an ETF, investors can access the gold market just as easily as buying shares of IBM or Exxon,” Rhind said. However, they don’t carry the same risk of going out of business like investing in individual gold stocks. Rhind’s firm offers the ETFS Gold Trust (SGOL), and another choice is the State Street Global Advisors SPDR Gold Trust (GLD).

Of course, investors can buy gold stocks, which generally fit into the mining category. But Standard & Poor’s equity analyst Leo Larkin, said gold stocks tend to be more volatile than gold itself. “When the price of gold goes down, [gold stocks] fall more, and when the price of gold goes up, they rise more,” he noted.

Coin Collecting

With that type of volatility risk, the high costs of mining gold and the fact that the current rally has boosted gold stocks significantly this year may make them a bit pricey with little upside left.

Investors can buy physical gold, such as gold coins, but people usually do this only when they expect to hold the gold for a very long time. Gold coins and bars are low risk, but the transaction costs of buying and selling them is high. And storing and securing them presents other problems, so they rarely trade. But they can be the right vehicle for many investors.

“If your objective is to hedge against foreign currencies, you might be better off buying gold coins,” said Larkin.

Another way to get exposure to gold is to buy gold mutual funds, which allow you to invest in a number of gold-related companies, but without the risk of being tied to only one company’s fortunes. S&P recommended a number of gold mutual funds highlighted in an earlier post.

Beware of the Future

About the only way individual investors should not gain exposure to gold is through options and futures. “Leave those to the professionals because they involve using leverage,” Larkin warned.

Since most analysts expect gold to spike whenever inflation begins to rear its ugly head, you can expect speculators to keep loading up on their positions and pushing prices higher over the short term. Uri Landesman, ING Investment Management’s head of global growth, suggests that about 25% of the market is on a gold-buying binge because they view it as a currency.

“There is a certain percentage of the population that is going to keep on buying gold, and these gold people almost exclusively add to their bets.” he said.

If you are not in that camp, just make sure you cash in your bets on gold before the speculators do.

Article taken from Daily Finance. Click here to view actual article.

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Angela Miles: Talk about striking it rich. The price of December gold at the New York Mercantile Exchange surged to a record high of $1,119 an ounce November 11.

Tobina Kahn: Is it a good time to sell your gold jewelry? Absolutely, we recommend. Gold is at its all time high.

AM: Tobina Kahn, V.P. of House of Kahn Estate Jewelers also believes it’s a time to buy gold estate jewelry as an investment.

TK: As an investment, well, it’s going to increase in value if the metal itself, the gold, goes up. Then, technically the item you have you’ll see your investment grow month to month and year to year.

AM: Kahn believes gold will rise to $2500 an ounce and offers insights to people who are thinking about buying gold jewelry as an investment.

TK: What we are looking for, and what is going to bring even more than what the ounce per gold is, is anything signed, anything from the 1940s and the 1950s. Any item from the retro period.

AM: Kahn adds that 22 and 24 karat gold gets top dollar. As a gemologist, Kahn is not a fan of people mailing in gold jewelry for cash back. Instead, she prefers to do a gold test in front of clients.

TK: Perhaps you are sending in a gold bracelet that has specific stones in mind. They’re just going to pay you the gold content but the stones might be something very rare.

AM: Gold has been trending higher on years of inflation and the falling dollar. Over the past 5 years, gold has risen from nearly $500 to well above $1000; leaving the Dow in its dust. The Dow today is right around where it was a few years ago.

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Cash In On Designer Bags And Jewelry

Date: Saturday, October 31st, 2009

Author: Suzanne Le Mignot

“We’re seeing a ton of gold jewelry. There’s no doubt about that,” said Tobina Kahn, Vice President of House of Kahn Estate Jewelers, located at 60 E. Walton St. in Chicago.

With the precious metal trading at an all time high, House of Kahn Estate Jewelers has been busy buying items, ranging from solid gold cuffs to woven gold evening bags.

“The fact that they would rather sell it, get the money for it and do something more with it, is really a good choice, especially if they’re not wearing it,” Kahn said.

Kahn also says 18-Karat gold and vintage items are the most valuable.

“Look for retro pieces. Maybe things from the 1940s, the 1950s.”

Large diamonds are also in big demand right now; anything three carats and up. The experts say diamonds are like portable currency.

Click on the image below to view the video from CBS2 News:

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Bulls, bears debate value of gold investing

Americans are beginning to wake up to grandma’s valued asset

By Dian Vujovich
Saturday, October 24th, 2009

You can hardly open a newspaper or turn on the television today and not see an advertisement for places to sell your gold jewelry or suggestions how to invest in this precious metal the entire world seems to love. And why not? It’s trading at all-time highs.

Adored by kings and queens, rulers and peasants, gold makes a statement whether in ring, broach, necklace, bracelet, crown, certificate, bullion, nugget or bar form. Even pooches have a statelier stride when a little golden bone dangles from their collars.

The value of gold goes up or down depending upon economic, personal or geopolitical circumstances. Right now its value is flying high; the price of gold recently traded at more than $1,058 an ounce. A decade ago, on Oct. 1, 1999, it traded at a fraction of that: $291.35 an ounce.

With debt in the United States rising and the value of the dollar diminishing, is now a good time to buy or sell gold? The answer depends upon with whom you speak.

Golden baubles

“If you believe that gold is going to go to $2,000 an ounce or even more and it’s $1,000 an ounce as we speak, then yes it’s a good idea to buy gold,” says Tobina Kahn, vice president of House of Kahn Estate Jewelers in Chicago. “If you believe in the U.S. dollar and think that the dollar is going to rise, then no, don’t buy gold.”

Kahn has been in the estate jewelry business more than 15 years. Her family has been in it more than 50 years. Her parents, Edward and Adele Kahn, own the Chicago shop and the House of Kahn Estate Jewelers on Peruvian Avenue.

Selling gold jewelry through an estate jeweler is different that plopping your old rings and bracelets into an envelope and shipping them off or visiting a “we-buy-gold” store and getting a check or cash.

Estate jewelers buy jewelry to resell it. They are a part of what’s considered the secondary market for gems and jewels. Companies that advertise bringing your gold jewelry directly to them typically melt it.

“I can’t get this point across enough,” Tobina Kahn said. “A lot of places are buying it for melting purposes. We do not melt anything down because if we were to melt it down, you’d be getting much less (for the piece). We try to keep it in its intact form because we’re going to resell it.”

Purchasing jewels at estate jewelers also is different than, say, shopping at fine retail jewelers. Because they are a part of the secondary market, estate jewelers offer a unique selection of jewels, often at value prices. That said, if the price of gold rises too high, even well-priced bobbles at the best estate jewelers could lose their luster.

Adele Kahn said she has concerns if the price of gold rises too high. “It could make jewelry too expensive, and we do want the consumer to be able to buy.”

Golden returns

Then again, gold has always been an international currency of sorts. Just ask your grandma. If she, or any of your relatives, came to the United States from anywhere around the globe in the early to mid-20th century, she probably carried with her some gold coins or jewelry, and stashed them away for safekeeping.

“Europeans have always believed in gold,” Adele Kahn said. “Gold is really an international currency and now Americans are waking up and realizing that. They have always thought it was something of a luxury, but now it’s rising above housing or stocks.”

Indeed, it has. The average gold-oriented mutual fund, for example, was up more than 19 percent during the third quarter of this year. Year-to-date, through Sept. 30, it is ahead 40.71 percent. The average S&P 500 index fund was up 15.42 during the third quarter of this year and 18.8 percent year-to-date, according to Lipper Inc. That’s quite a spread.

Even looking back three and five years, the value of this precious metal still shines. The average gold-oriented fund had an average annual total return of 11.46 percent for the past three years, and 15.38 percent for the past five years, again ending Sept. 30. On the other hand, the average S&P 500 index fund was down 5.9 percent for the last three years and only up one-half of one percent over the past five years.

“Don’t tell me that jewelry doesn’t earn interest,” Adele Kahn said. “When things get rough what do men do? They sell their wives’ jewelry.”

Gold, inflation and the dollar

“As much as people talk about gold being an inflation hedge, I think that there are a lot of choices out there that work better,” says Jeff Tjornehoj, research manager for the United States and Canada at Lipper. “TIPS, for instance, would be a much better choice.”

Research he’s seen doesn’t always show gold acting as a hedge against inflation, Tjornehoj said. And TIPS, Treasury Inflation-Protected Securities, are designed to protect against inflation because their values increase with inflation and decrease with deflation.

That said, Tjornehoj says there is merit in the theory that gold is responding to a lack of optimism and faith in U.S. currency.

Pierre Duga, a financial correspondent for Radio France and Le Figaro newspaper, says that because of America’s huge debt and massive printing of money, he expects the value of the U.S. dollar to become weaker in the future when measured against currencies such as the Chinese yuan and Japanese yen.

“The American economy was the big engine of growth for the world,” Duga said. “The American consumer was the consumer of last resort. That has collapsed. What’s happening is a rebalancing of the world’s economies.”

Duga said he is still a fan of gold as a hedge against inflation, preferring ETFs to holding gold bullion. He also likes currency plays. “The idea is to buy something that holds its value. When you start not trusting the dollar any more, buy hard assets (such as gold),” he said.

“We keep measuring things as if the dollar was the single currency to value things by and is defined by its weight in gold. We’re no longer in 1971,” he said.

Golden opportunity, or not?

So where does that leave us? Right where we started: Having to make hard investment decisions regarding what we think will happen to the value of our currency, interest rates — and gold — given current economic conditions.

Then we should consider how our answers play into what’s going on in the world and what the future could bring — understanding there’s no such thing as a sure bet.

As for bangles, baubles and rings made of gold, why not buy them? They wear well no matter what’s going on in the world.

GOLD’S UPS & DOWNS

Since President Richard Nixon took the U.S. dollar off the gold standard in 1971, its value has fluctuated.

A few examples:

* August 1971, one Troy ounce of gold was valued at $35 an ounce. A year later it was $38 an ounce. In May 1972, the U.S. devalues the dollar to $42.22 a Troy ounce.
* January 1980, gold hits a new high of $850 per ounce.
* August 1999, gold is trading at $251.70 an ounce.
* November 2005, it’s $500 per ounce.
* May 2006, the price hits a high of $730. One month later, it’s fallen 26 percent to $543 an ounce.
* March 2008, gold hits a high of $1,030.80.
* January 2009, gold closed the month at $919.50.
* October 2009, gold hits an all-time high of $1,058 an ounce.

House of Kahn Estate Jewelers
60 East Walton Street
Chicago, Illinois 60611
USA
312-943-9937

House of Kahn Estate Jewelers
231 Peruvian Avenue
Palm Beach, Florida 33480
USA
561-655-3743

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A Golden Opportunity

BY MILLIE MUNSHI
September 20th, 2009

With gold jumping above $1,000 an ounce, inquiries from people interested in selling it have jumped fivefold in two weeks at the House of Kahn Estate Jewelers in Chicago.

“Every time we hit the $1,000 mark, we see this phenomenon of people stepping in to sell their gold,” said Tobina Kahn, a company vice president. “They sell their old jewelry sitting at home, things they got as gifts. They need instant money.”

“The days are over when gold was just a luxury jewelry item,” said Kahn, whose Chicago store is at 60 E. Walton. “Now, people want to sell it or melt it.”

Randy Cohen, co-owner of the Royal Pawn Shop, 428 S. Clark, says a $24,000 solid gold Rolex watch was pawned for $7,000 last year. Today, he says, he’d probably have to give the guy $9,000.

“Every day we buy tons and tons of gold,” Cohen said.

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.

“I think it’s going to keep going up,” said Kahn.

Consumers rushing to cash in have scrap sales, including used jewelry, estimated to rise 22 percent in 2009, said Philip Klapwijk, the chairman of industry researcher GFMS Ltd.

People are selling as the recession sends the jobless rate to the highest level since 1983. The economy has erased $13.9 trillion in household wealth, according to the Federal Reserve.

The jewelry wasn’t worth nearly as much five years ago, when gold lingered around $400 an ounce on the Comex division of the New York Mercantile Exchange. The precious metal also fell as low as $253.20 in 1999, a year when the S&P rallied 20 percent and the U.S. economy grew 4.8 percent.

This month’s rally above $1,000 was sparked by signs of a rebounding economy and concern that increased government spending will stoke inflation.

“There’s not that much difference in value between $950 or $1,000 gold,” said Michael Musheyev, an EZSellGold co-owner. “But when everyone sees that $1,000 level, or they hear about it in the news, it makes them go gaga.”

But Kahn warns that a lot of gold jewelry is not 100 percent gold and won’t fetch the $1,000.

“People want a quote over the phone, but they have to bring it in,” she said.

A survey by Bloomberg showed 10 of 12 analysts, traders and investors expect gold to top its record.

“I think it’s going to keep going up,” Kahn said.

Bloomberg News with Sun-Times staff

House of Kahn Estate Jewelers
60 East Walton Street
Chicago, Illinois 60611
USA
312-943-9937

House of Kahn Estate Jewelers
231 Peruvian Avenue
Palm Beach, Florida 33480
USA
561-655-3743

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MarketBeat looks under the hood of Wall Street each day, finding market-moving news, analyzing trends and highlighting noteworthy commentary from the best blogs and research.

At $1,000, Gold Bugs Come Out in Chicago

By Peter A. McKay
September 18th, 2009

Gold’s recent run over $1,000 has caused many people to take a second look at the several exchange-traded funds, futures, and other investment vehicles linked to the metal. But some are also digging into their jewelry boxes and dressers to see what they can get for their heirlooms.

So says Tobina Kahn, a Chicago estate jeweler who sometimes checks in with us to offer a woman-on-the-street view of the gold market. Unlike a typical shopping-mall jewelry outlet, an estate jeweler like Ms. Kahn acts as both a seller and a buyer at various times.

Her recent experience has an interesting twist: Last week, as gold approached $1,000 for the first time since February, Ms. Kahn said the headlines surrounding that round-number milestone attracted perhaps 8 or 10 new sellers a day into her shop, looking to unload everything from designer jewelry to simpler pieces. It would normally take about a month to get that kind of foot traffic, Ms. Kahn estimates.

This week, as gold has edged beyond a $1,000, the number of visitors to the store has stayed high. But Ms. Kahn says the stream has also included more buyers, including some worried about the sagging value of the dollar or a possible reversal of the stock market’s recent boom.

Her take on those buyers: “People are willing to look at gold more as an investment. They’ve moved beyond the old idea that, hey, it doesn’t pay a dividend. I mean, who would be better off today — a person who bought bank stocks looking for the dividends or someone who bought gold?”

Of the sellers, she said: “You still have a lot of people who need money, but they’re also being more selective. Some people are disappointed at what we can offer for one ring or one necklace. In some of those cases, they don’t go through with a sale.”

— via MarketBeat

House of Kahn Estate Jewelers
60 East Walton Street
Chicago, Illinois 60611
USA
312-943-9937

House of Kahn Estate Jewelers
231 Peruvian Avenue
Palm Beach, Florida 33480
USA
561-655-3743

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The House of Kahn Estate Jewelers is proud to be featured on Bloomberg News, one of the world’s largest and most trusted information sources, and Bloomberg Television, the only worldwide 24-hour business and financial television network. This article and news video discusses the exciting phenomenon of the rising price of gold.

Gold at $1,000 Spurs Sales of Old Jewelry as Scrap Rises 22%

By Millie Munshi

Sept. 17 (Bloomberg) — 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.

Murado would have received a gain of $634 by putting $500 into the Standard & Poor’s 500 Index in 1994, excluding dividends, compared with the $3,000 windfall from his bracelet and necklace.

Earlier Slump

The jewelry wasn’t worth nearly as much five years ago, when gold lingered around $400 an ounce on the Comex division of the New York Mercantile Exchange. The precious metal also fell as low as $253.20 in 1999, a year when the S&P rallied 20 percent and the U.S. economy grew 4.8 percent.

Gold jumped to a record in March 2008 as financial turmoil boosted the metal’s appeal as a haven. The price dropped to a one-year low of $681 on Oct. 24 as the S&P headed for its biggest monthly loss in 21 years, prompting traders to sell assets to raise cash. This month’s rally above $1,000 was sparked by signs of a rebounding economy and concern that increased government spending will stoke inflation.

“There’s not that much difference in value between $950 or $1,000 gold,” said Michael Musheyev, an EZSellGold co-owner. “But when everyone sees that $1,000 level or they hear about it in the news, it makes them go gaga.”

At the House of Kahn Estate Jewelers in Chicago, inquiries from people interested in selling gold have jumped fivefold in two weeks, said Tobina Kahn, a vice president. At Cash4Gold LLC, which calls itself the world’s biggest used-gold buyer, queries are up “significantly,” Chief Executive Officer Jeff Aronson said, without being more specific.

Recession Push

“Every time we hit the $1,000 mark, we see this phenomenon of people stepping in to sell their gold,” Kahn said. “They sell their old jewelry sitting at home, things they got as gifts. They need instant money.”

Demand for the precious metal pushed gold to a record of $1,033.90 an ounce in March 2008. The gains enticed jewelry sellers and sent scrap supplies to an all-time high of 1,218 metric tons last year, said GFMS, the former research unit of South Africa’s second-largest gold producer.

Scrap supplies will jump to a record 1,485 tons this year, Klapwijk said in a Sept. 14 interview. The gains may “play a role in capping” the bullion rally, said Klapwijk, who joined two other managers to acquire a unit of Consolidated Gold Fields in 1998 to create GFMS. Scrap gold represents about 25 percent of global supply, according to the World Gold Council in London.

Rising Price

The interest in bullion has kept the influx of scrap from depressing the market, said Aronson, a co-founder of closely held Cash4Gold in Pompano Beach, Florida.

Gold futures have surged 15 percent this year, touching an 18-month high of $1,023.30 yesterday on the Comex, and are heading for a ninth annual gain. Scrap supplies rose 39 percent to 880 tons in the first half of the year, according to London- based GFMS.

“With the amount of gold that people on the investment side want right now, there’s never a situation where you’re oversupplied,” said Aronson, who is 36.

Analysts expect gold to keep rallying. Gold for immediate delivery in London will average $959 an ounce in the fourth quarter, up from $928 since Dec. 31, and will reach $988 in the second quarter of 2010, based on the median of estimates collected by Bloomberg from 18 analysts.

A separate survey by Bloomberg last week showed 10 of 12 analysts, traders and investors expect gold to top its record.

Barrick’s Bet

Toronto-based Barrick, citing “an increasingly positive outlook on the gold price,” said in a Sept. 8 statement that the company will eliminate sales contracts for about 9.5 million ounces of gold at fixed prices. To fund some of the costs to exit the agreements, the company is selling $3 billion of stock.

Gold held by Jersey, Channel Islands-based ETF Securities Ltd.’s exchange-traded products climbed to a record of 8.272 million ounces (257.3 tons) yesterday. Demand for gold through exchange-traded funds will rise to 700 tons this year, from 322 tons last year, Barclays Capital said on Sept. 11.

At Empire Gold Buyers in New York, President Gene Furman said he’s seeing customers trading in luxury brands for cash. “They’re looking to sell their Tiffany and Cartier jewelry,” Furman said.

“The days are over when gold was just a luxury jewelry item,” said Kahn in Chicago. “Now, people want to sell it or melt it.”

For Murado, the prospect of higher prices means he will probably unload more of his jewelry.

“Everybody is interested in buying gold now, so I’m going to be selling every day when the price is above $1,000.”

— via Bloomberg News

Please click the above image to view the House of Kahn Estate Jewelers featured on Bloomberg Television.

House of Kahn Estate Jewelers
60 East Walton Street
Chicago, Illinois 60611
USA
312-943-9937

House of Kahn Estate Jewelers
231 Peruvian Avenue
Palm Beach, Florida 33480
USA
561-655-3743

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