Less than 10 years ago, gold was not even worth $300 an ounce. Now, this week, it’s being listed as worth upwards of $1,000 per ounce, consistently ringing in at a price more valuable than ever.
Of course, those values aren’t adjusted for inflation and the fluctuating worth of the dollar. But the perception of what gold is worth in simple dollar units seems to affect Temple residents’ consumer habits.
“Everybody’s thinking that it’s worth 10 times what it used to be,” Leland Kjelland, owner of Mid-City Pawn, said.
And now, with gold prices at an all-time high, many Temple residents are scraping the bottoms of their drawers, looking to hawk anything that shines yellow.
“Nothing Gold Can Stay” is the title of one of American poet Robert Frost’s most famous poems. It’s also the current name of the game for many in Temple - not to mention the United States at large.
The first line of the poem reads: “Nature’s first green is gold.” Of course, Frost wasn’t talking about money when he wrote it, but he might as well have been. America’s first and last “green” has always been gold.
Even after 1971, when the U.S. economy was taken off the gold standard, citizens thought of gold as their last bastion and first resort in any crisis. The current crisis of the dropping green dollar and rising oil prices serves as no exception.
“What I’ve seen happen in the gold market is that when the stock market goes crazy, the gold prices go uphill,” Kjelland said. “When the stock market goes bad, people think they need to start venturing into gold.”
New York Pawn owner Robert Talasek agreed.
“As the dollar goes down, the gold goes up,” he said. “And you know gold will never be worth nothing. That’s the main thing in a time like this.”
Kjelland said that when he first got into the business, 43 years ago, gold was only $35 per ounce.
That was back when the government still regulated the price.
“Then,” he said, “the government turned it loose and it became a commodity that was traded on the market just like anything else.”
But even on the market, gold has hit some low points. According to the World Gold Council, “As financial markets developed rapidly during the 1980s and 1990s, gold receded into the background and many investors lost touch with this asset of last resort.”
In June 1999, the price of gold reached $252.90 per ounce - the lowest since the United States had been taken off the gold standard. However, since that date, it has more than bounced back with a considerably steady rise.
The price of gold began its biggest rise early last fall. It finally broke the record on Jan. 3 when the price reached $865.35 per ounce. This month, the price has jumped daily between the mid-$900s and record highs of more than $1,000.
“It’s been fluctuating a couple dollars,” Talasek said. “But this is the highest it’s been in 30 years, as far as I’ve seen.”
And these record prices have certainly trickled down to affect local markets.
Some Temple jewelry stores have taken hits, seeing less and less customers looking to spend amidst the current economic unease.
One employee in a Temple mall jewelry store has seen the impact.
“We just did some price changing not so long ago. We had to re-tag a lot of merchandise in the store. Prices went up. I mean we’ve changed prices before, but it’s never been something as significant as this,” he said. “Now, pieces have increased sometimes at least $100 to $200 in price. Simple jewelry repairs went up a couple dollars, like sizing a ring. We used to charge $5. Now it’s gone up to $9.99. And any additional sizing after that is, you know, $21.99 and up.”
The employee attributed the changes to the economy and the gas prices.
“It affects everything all around,” he said. “People aren’t so sold on credit to purchase. It puts on a little bit more restrain. We still have our comeback clientele, but it’s been a slow spring.”
Pawn shops have experienced the opposite effect.
“We’ve had a lot of business, a lot of people coming in to sell gold coins and scrap gold,” Talasek said. “A lot of them are really digging in the drawers looking for broken chains to sell, a single earring when they lost the other one, a ring that maybe they just don’t wear out. They’re just going through their drawers and boxes. I think they know this is probably the prime time.”
Talasek said he didn’t think the price of gold would reach much over $1,000 per ounce.
Kjelland wasn’t as ready to predict.
“It more depends on what goes on worldwide,” he said. “Our dollar is weak now. But, hopefully, it’ll straighten out here before too long and everything will kind of settle off. I mean, who ever dreamed of $3.15 for gas? I never dreamed we’d do that. But then I remember 19 cents a gallon for gas.”
Kjelland attributed his customers’ rush to sell more to the gas problem than the rising price of gold.
“My basic customer isn’t so worried about what gold is going for,” he said. “He’s worried about getting enough gas in his car to go to and from work and buy groceries or support a cigarette habit.”
He said it’s more about the fast cash than any sort of commodity investment.
“We’re the poor man’s bank. The regular bank isn’t going to lend people $100. But we can do small loans: $10, $15, $100, $75 - whatever the merchandise warrants.”
Talasek said his customers are in it for the quick cash, too. He said some of his customers are even going to garage sales and flea markets looking for gold to sell. It’s sort of a modern attempt at panning for gold, turning the lower and middle class pawn customers into unofficial prospectors in a modern-day gold rush.
The second line in Frost’s poem refers to gold as “Her hardest hue to hold.” This line, in terms of the gold market, rings as true as the first. Though silver and platinum are also on the rise with markedly high prices, it’s only gold that’s really got pawn shop customers in a selling frenzy.
“The pawn customer has a lot of gold,” Kjelland said. “That’s the one thing. Everybody likes to wear gold.”
And these days, everybody likes to sell it.
